In a major overhaul of India's inflation measurement system, the government will gradually replace the Wholesale Price Index (WPI) with the more comprehensive Producer Price Index (PPI), aligning the country with global best practices. The revised WPI series and the newly introduced PPI series, both based on the 2022-23 base year, will be officially launched on June 15, 2026.

Key Highlights

• India will launch Producer Price Index on June 15, gradually replacing Wholesale Price Index nationwide.
• New PPI framework includes output, input and services indices, aligning with global standards.

Announcing the transition, Praveen Mahto, Principal Economic Adviser in the Ministry of Commerce and Industry said, "The Department for Promotion of Industry and Internal Trade (DPIIT) will release the updated WPI series, replacing the current 2011-12 base year index. Simultaneously, a new PPI framework will be introduced to provide a broader and more accurate assessment of inflationary trends across the economy."

The new Producer Price Index will comprise three key components-Output PPI, Trial Input PPI, and Services PPI. Initially, the Services PPI will cover seven sectors, including banking, securities transactions, insurance, pension fund management, railways, air passenger transport, and telecommunications.

PPI to Replace WPI Over Five Years

The government has clarified that WPI will continue to be published alongside PPI for the next five years to facilitate a smooth transition. Given the widespread use of WPI in government contracts and price-escalation clauses, the transition period is expected to provide businesses and institutions sufficient time to adopt the new index. After this phase, PPI is expected to become India's primary producer inflation benchmark.

The shift reflects recommendations from the International Monetary Fund (IMF) and follows the practices of major economies such as the United States, China, Japan, Germany, and France, all of which use Producer Price Indices to track price changes faced by domestic producers.

Revised WPI Basket Expands to 957 Items

The revised WPI basket has also undergone significant changes. According to Dilip Kumar Sinha, Deputy Director General in the Office of the Economic Adviser, the number of items tracked under WPI has increased from 697 to 957. Renewable energy sources such as solar and wind power, along with nuclear electricity, have been included in the electricity category. Crude petroleum and natural gas have been moved from primary articles to the fuel and power segment for better classification consistency.

Also Read: India's Retail Inflation Hits 13-Month High of 3.48% in April

DPIIT stated that WPI and Output PPI will be published monthly, beginning with provisional data for May 2026 and historical data dating back to April 2023. Trial Input PPI for the manufacturing sector will initially be released on an experimental basis from March 2026 onward, while the Services PPI will be published quarterly.

The transition comes at a time when wholesale inflation remains under scrutiny. India's wholesale price inflation surged to a 42-month high of 8.3% in April, largely driven by rising energy costs amid geopolitical tensions in West Asia.