India’s Wholesale Inflation Eases to 9.78% in July as Fuel Prices Cool

India’s wholesale price inflation (WPI) eased marginally to 9.78% in July 2026 from 9.87% in June, marking the first month-on-month decline under the government’s new 2022-23 WPI base year. Despite the moderation, wholesale price pressures remain elevated after a sharp acceleration since the beginning of the financial year.

The surge has been driven largely by higher global crude oil, fertiliser and commodity costs, with the West Asia conflict and disruptions around the Strait of Hormuz adding pressure to energy markets. India imports most of its crude oil, making global oil-price shocks an important channel for domestic wholesale prices. Higher input costs have also fed into metals, chemicals, manufactured food products and other industrial goods.

The six-month trend shows the scale of the acceleration. Under the earlier WPI series, inflation stood at 2.26% in February and 3.88% in March, before rising to 8.36% in April. The government subsequently introduced the 2022-23 base-year series, under which WPI inflation was 9.68% in May, 9.87% in June and 9.78% in July. Because of the change in base year, the February-April figures are not directly comparable with the May-July readings.

Fuel and power inflation provided the biggest relief in July, falling sharply to 20.05% from 27.41% in June. Food article inflation eased slightly to 5.44%, while manufactured products inflation increased to 8.29% from 7.48%, indicating continued pressure on industrial input costs.

The inflationary pressure also comes as retail inflation rose to 4.45% in July, driven mainly by food prices. The reading remains within the Reserve Bank of India’s 2-6% tolerance band but is above its 4% medium-term target.

Against this backdrop, the RBI kept the repo rate unchanged at 5.25% earlier this month and projected FY27 retail inflation at 5%. The central bank is therefore maintaining a cautious stance while monitoring food prices, monsoon conditions and global energy costs before considering further policy action.