Wholesale inflation nears double digits in June as food and fuel costs rise

India's annual wholesale price inflation accelerated to 9.87% in June from 9.68% in May, as food prices and elevated energy costs continued to push up producer prices, according to provisional data released by the commerce and industry ministry on Tuesday.

“Mineral Oils (containing Petroleum Products)’, ‘Food Articles’, ‘Manufacture of Basic Metals’, and ‘Manufacture of Chemicals and Chemical Products’, have been major drivers of WPI inflation in June 2026,” the ministry said in a statement.

The Wholesale Price Index (WPI) for all commodities rose to 110.2 in June from 109.9 in May. Inflation in primary articles accelerated to 7% from 4.99% in May, while inflation in manufactured products held steady at 7.48% for a second consecutive month. Fuel and power inflation eased to 27.41% from 30.33%, but remained elevated, according to the statement.

Wholesale food inflation also strengthened, with the WPI Food Index rising 6.14% year-on-year in June from 4.49% in May, reflecting firmer prices of both food articles and manufactured food products.

Among key sub-groups, inflation in food articles accelerated to 5.49% in June from 3.6% in May. Inflation in mineral oils remained exceptionally high at 46.48%, although it eased from 49.82% in May. Inflation in basic metals edged up to 12.31% from 12.3%, while chemicals and chemical products eased marginally to 12.78% from 13.4%. Inflation in rubber and plastic products increased to 9.94% from 9.59%, while electrical equipment inflation stood at 11.03%.

The government also revised April's final wholesale inflation to 8.36% from the provisional estimate of 8.26%, after revising the WPI index to 108.9 from 108.8. The provisional June estimate was compiled with a weighted response rate of 82.6%, while the final April estimate is based on a 97.5% weighted response rate.

“The June WPI inflation print is significant because it has become more broad-based than before and extends the steady uptrend seen since November, when wholesale prices were in deflation,” said Madan Sabnavis, chief economist at Bank of Baroda.

He said the surge in fuel-related products has sharply raised input costs for industries, with spillovers visible across chemicals, rubber and plastics, textiles and metal products. Sabnavis also noted that primary inflation remained elevated, led by food and non-food articles, while vegetables, fruits, eggs, meat, fish and spices were the key contributors to food inflation.

According to him, the recent escalation in geopolitical tensions and rebound in crude oil prices above $80 per barrel, along with uncertainty surrounding the monsoon and kharif crop, could keep WPI inflation elevated in the 9-10% range over the next couple of months.

Driven by rising food prices, India's retail inflation accelerated to 4.38% in June from 3.93% in May, breaching the Reserve Bank of India's (RBI) medium-term target of 4% for the first time since January 2025, according data released Monday.

The RBI expects inflation to average 5.1% in FY27, as the pass-through of higher global energy prices and second-round effects from rising input costs could keep price pressures elevated. The outlook reflects the fallout from the West Asia conflict, with shipping disruptions in the Strait of Hormuz—a key route for most of India's crude oil imports—driving up energy costs and spilling over into food prices.

Rahul Agrawal, principal economist at rating agency Icra Ltd, said the June WPI inflation print was higher than expected as food inflation surged to an 18-month high of 6.1%, although some easing in commodity prices helped moderate core wholesale inflation.

Icra expects wholesale inflation to moderate slightly to around 9% in July, with the trajectory thereafter depending largely on global commodity prices and the progress of the southwest monsoon, Agrawal said.