India’s WPI Inflation Rises In March On Surge In Global Energy Prices

India’s wholesale price inflation (WPI) edged up in March, driven largely by rising global energy prices amid geopolitical tensions in West Asia, economists said on Wednesday.

Rahul Agrawal, Senior Economist at ICRA, noted that crude petroleum, natural gas, and the fuel and power segments led the broad-based increase.

“Notably, these two groups together accounted for 150 basis points of the 175 basis points uptick in the headline print in March 2026 relative to February 2026,” he said.

Agrawal added that food inflation remained steady at 1.8 per cent, while core WPI, comprising non-food manufactured items, rose to a 41-month high of 3.7 per cent from 3.3 per cent in February.

On a sequential basis, the core index increased by 0.7 per cent in March, in line with recent trends.

Agrawal said elevated global energy prices, along with higher shipping, freight, and input costs, are likely to raise landed import costs and exert further pressure on wholesale inflation in April.

Assuming an average crude oil price of $85 per barrel for FY27, ICRA has projected WPI inflation at around 3.5 per cent, with risks including a potentially deficient monsoon linked to El Niño conditions.

West Asia Crisis Impacts WPI More Than CPI

Rajani Sinha, Chief Economist at CareEdge Ratings, said the latest WPI data reflects a stronger impact of the West Asia crisis compared to retail inflation.

“This divergence is driven by a sharp increase in bulk diesel and other commercial fuel prices, while retail petrol and diesel prices remained unchanged,” she said.

Rajani Sinha highlighted that bulk diesel prices rose by over 25 per cent in March, while domestic gas cylinders increased by ₹60 and commercial cylinders by ₹310 cumulatively. She added that even with an early resolution of the crisis, crude oil prices are likely to average $85–90 per barrel in FY27.

“The burden of higher global crude oil prices will fall on households, the government, and OMCs,” Rajani Sinha said.

Sinha added that oil marketing companies could absorb prices up to $100–105 per barrel due to strong refining margins and projected WPI inflation at around 5 per cent for FY27.

On monetary policy, Rajani Sinha said the Reserve Bank of India is likely to maintain the status quo.

“Given the lingering growth concerns, the RBI will not be in a hurry to reverse the rate cycle,” she said, adding that rate cuts may considered later if growth weakens significantly.

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