WPI Inflation Data: WPI Inflation At 9-Month High of 1.81% in January 2026

India's wholesale price inflation moved higher in January 2026, touching 1.81% compared with 0.83% in December. The nine-month peak was led by costlier basic metals, other manufactured products, food articles, non-food articles and textiles, while the wholesale price index itself rose 0.51% month-on-month during January.

Food inflation under the wholesale price index also quickened, reaching 1.41% in January after staying at 0.00% in December. That rise came even though a Reuters survey of economists had expected wholesale price inflation to climb only modestly, to 1.25% year-on-year from December's 0.83% reading.

Wholesale price inflation and retail CPI trends in January 2026

Retail prices showed similar upward pressure. India's consumer price inflation, now measured with a 2024 base year, stood at 2.75% in January 2026. Inflation in rural areas came in at 2.73%, while urban inflation registered 2.77%, driven mainly by stronger food prices and higher costs of precious metals.

Different components of wholesale price inflation moved in contrasting directions. Primary articles inflation accelerated sharply to 2.21% in January, from only 0.21% in December. However, fuel and power inflation stayed negative, with prices contracting 4.01% in January, deeper than the 2.31% decline recorded a month earlier.

Wholesale price inflation breakdown for manufactured goods and kitchen staples
Manufactured products under wholesale price inflation also became costlier. Inflation for this category rose to 2.86% in January, up from December's 1.82%. This increase in manufactured goods, combined with higher primary article prices, underpinned the broader rise in wholesale costs across the economy.

Kitchen essentials saw mixed movements within wholesale price inflation. Vegetable prices rebounded in January, rising 6.78% year-on-year after a 3.50% fall in December. Onion prices remained in deflation, but the drop slowed to 33.42% compared with a steep 54.40% slide earlier. Potatoes continued to become cheaper, with prices down 38.84% versus 38.21% in December.

Cereals and pulses also weighed on wholesale price inflation. Cereal prices declined for the fourth month in a row, falling 1.41% in January after a 1.18% drop in December. Pulse prices contracted 11.05%, easing from a 13.88% decline. Milk inflation moderated as well, with prices up 2.51% year-on-year, lower than December's 3.23% rise.

Wholesale price inflation context and RBI's revised inflation path

Monetary policy makers responded to these wholesale price inflation trends by adjusting forecasts. The Monetary Policy Committee of the Reserve Bank of India signalled that its earlier view of inflation steadily easing through FY27 no longer held, and that risks had shifted slightly upward.

For FY26, the committee raised its estimate of headline consumer inflation to an average of 2.1%, with Q4 now seen at 3.2%. In December, the projection for Q4 FY26 had been 2.9%, and earlier, in October, the FY26 inflation forecast had been trimmed to 2% from 2.6% as disinflation looked stronger.

The RBI also adjusted the inflation path for FY27 while tracking wholesale price inflation trends. It now expects consumer price inflation at 4% in Q1 FY27 and 4.2% in Q2. The December projections had suggested Q1 at 3.9% and Q2 at 4%, implying a gentler path than the latest assessment.

Wholesale price inflation, RBI policy stance and growth outlook

Despite higher wholesale price inflation and a slightly firmer CPI outlook, the Reserve Bank of India left interest rates unchanged. The Monetary Policy Committee kept the benchmark repo rate at 5.25% and maintained a neutral stance, signalling a wait-and-watch approach to both domestic and global developments.

The RBI's growth view stayed broadly positive alongside rising wholesale price inflation. The central bank lifted its real GDP growth projection for 2025-26 to 7.4%, up from an earlier estimate. It noted support from higher government spending in the Union Budget and progress in trade talks with the United States and the European Union.

Even as wholesale price inflation edged higher and the RBI flagged possible slower momentum later in 2025-26, the growth forecast remained above the government economic adviser's estimate of 6.8%-7.2%. Together, the data suggested manageable price pressures for now, with policymakers balancing inflation risks against the need to sustain economic expansion.