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India’s WPI inflation to stay high through FY27, says ICICI Bank

Rahul Kumar | August 15, 2026 1:23 PM CST

India's wholesale price inflation (WPI) is likely to remain elevated through FY27, an ICICI Bank report says. Despite a marginal easing to 9.8% in July, higher food, fuel, and global energy prices pose an upside risk to the outlook.

India's wholesale price inflation (WPI) is likely to remain elevated through FY27 amid a low base, higher food and fuel prices and uncertainty around global energy prices, even as the headline rate marginally eased to 9.8 per cent in July from 9.9 per cent in June, according to a research report by ICICI Bank.The report said there is an expectation of a limited pass-through from wholesale to consumer inflation, with retail prices likely to remain relatively sticky. It projects consumer price inflation (CPI) to average 4.8 per cent in FY27. However, sustained global crude oil prices at elevated levels could pose an upside risk to WPI inflation.

WPI Eases Marginally in July

WPI inflation stood at 9.8 per cent year-on-year in July 2026, sharply higher than the -0.8 per cent recorded a year earlier. On a sequential basis, the WPI index contracted marginally by 0.2 per cent month-on-month.

Fuel and Power Inflation Drives Moderation

The moderation in July was primarily driven by fuel and power inflation, which fell to 20 per cent from 27.4 per cent in June. Mineral oils inflation eased to 32.4 per cent from 46.5 per cent, while LPG prices declined 9.1 per cent month-on-month. ATF and naphtha prices also softened.

However, global crude oil prices have averaged USD 86.8 per barrel in FY27 so far, compared with USD 69 per barrel in FY26, creating a potential upside risk if elevated levels persist.

Component-wise Inflation Trends

Meanwhile, primary articles inflation accelerated to 8.5 per cent from 7 per cent in June, reaching a 21-month high. Non-food articles inflation rose sharply to 17.7 per cent from 11.1 per cent, while food articles inflation remained at 5.4 per cent. Condiments and spices, and eggs, meat and fish recorded particularly high inflation.

Manufactured product inflation also rose to 8.3 per cent, its highest level in 28 months. Inflation remained elevated across chemicals, textiles, basic metals, rubber and plastics, electrical equipment and fabricated metals, while food product inflation increased to 8.9 per cent. Producer price pressures also remained firm, with output PPI unchanged at 9.6 per cent, its highest level since April 2024.

Future Outlook

An improved monsoon and sowing outlook could, however, support some moderation in food inflation in the second half of FY27. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)