The YoY WPI inflation hardened to a 38-month high of 3.9% in March 2026 from 2.1% in February 2026, while printing largely in line with ICRA’s forecast (+4.0%). Crude petroleum and natural gas, and fuel and power categories were the predominant drivers, accounting for 150 bps of the total 175 bps uptick in headline print between these months, owing to global energy supply disruptions triggered by the West Asia conflict. Looking ahead, the adverse impact of the rise in energy prices, along with elevated shipping and input costs is expected to continue to weigh on the landed cost of imports, thereby exerting upward pressure on the WPI print. ICRA projects the WPI inflation to harden further to ~4.8% in April 2026. Assuming an average crude oil price of $85/barrel for FY2027, ICRA pegs the WPI inflation to average at ~3.5% in the fiscal, with sizeable upside risks, including those stemming from a deficient monsoon owing to potential El Nino developments.
March 2026 WPI inflation jumped to 38-month high of 3.9%: The WPI inflation nearly doubled to 3.9% in March 2026 from 2.1% in February 2026, while printing largely in line with ICRA’s forecast (+4.0%). Crude petroleum and natural gas, and the fuel and power groups witnessed sizeable hardening in their YoY inflation rates, reflecting the impact of the surge in global energy prices owing to the West Asia crisis. Notably, these two groups together accounted for 150 bps of the 175 bps uptick in the headline print in March 2026 relative to February 2026.
Core-WPI inflation rose to 41-month high: While WPI-food (primary food articles + manufactured food products) inflation remained steady at 1.8% in March 2026, the non-food manufactured items or “core-WPI” hardened to a 41-month high of 3.7% from 3.3% in February 2026, driven by chemicals, textiles, motor vehicles, etc.