Wholesale Inflation

India's wholesale inflation hit 8.3% in April, a 42-month high, mainly due to rising energy prices from the West Asia conflict. Experts note a weak correlation with consumer prices, suggesting retail inflation may not rise significantly despite the wholesale increase.

The rise in inflation points to a growing squeeze on producer margins, which is likely to become visible in corporate earnings during the first quarter, said economists

The Indian rupee opened higher at 93.28 against the dollar, supported by ceasefire optimism, but limited by dollar demand. The rupee stabilizes around 93, with geopolitical tensions and rising inflation affecting market sentiment, while oil prices remain a critical factor for India's economy.

Food inflation, a key driver of the index, turned negative at -5.04% in October, from -1.99% in September, 0.21% in August, -2.15% in July, and -0.26% in June. The fall in wholesale prices in October was led by lower prices of vegetables, wheat, pulses and oilseeds.

Food and fuel prices eased in September, pulling down wholesale inflation to 0.13% after a modest rise in August, even as core inflation climbed to a 31-month high.

Retail inflation cooled to 2.1% in June, its slowest pace since January 2019, while wholesale inflation slipped to a 21-month low of -0.13%, the first negative print since October 2023, according to provisional data released on Monday

A decline in prices of food, non-food manufacturing, fuel and power segments contributes to the dip in the wholesale price index (WPI)-based inflation.

Wholesale inflation, a key gauge of producer prices, rose 2.05% year-on-year in March, down from 2.38% in February.

Food price inflation, a major contributor to the wholesale price index, rose by 11.59% annually in October, compared to a 9.47% gain in September.

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