The YoY WPI inflation soared to a 42-month high of 8.3% in April 2026 from 3.9% in March 2026, led by the energyrelated segments, reflecting the fallout of the West Asia crisis and the depreciation in the USD/INR pair. The fuel and power, and crude petroleum and natural gas segments accounted for as much as 356 bps of the 442 bps uptick in the headline WPI print between these months. Looking ahead, the WPI inflation is set to surpass 9% in May 2026, amid early trends of hardening in food items like edible oils, milk, etc., as well as continued pass-through of rising energy and commodity prices, and a low base. Given the relatively faster transmission of energy price shock to the WPI inflation vis-a-vis the CPI inflation, the wedge between the two soared to 482 bps in April 2026 from 47 bps in March, reinforcing our expectation that the CPI inflation would exceed 4% in May 2026.

EXHIBIT: The share of items in WPI basket* reporting a sequential increase in prices spiked to 66% in April 2026 from 50% in March 2026, while printing almost 16pp higher than pre-pandemic average for April

*Based on the 697 items covered in the WPI basket; Source: Office of the Economic Advisor, Ministry of Commerce and Industry, GoI; CEIC; ICRA Research