India’s WPI Inflation Climbs to 1.81% in January, Hits 10-Month High

India’s WPI inflation (Wholesale Price Index inflation) rose to 1.81% in January 2026, marking a 10-month high. This is the third consecutive monthly rise in wholesale inflation. The increase was mainly driven by higher prices of food articles, non-food items, and manufactured products. However, retail inflation measured by CPI remained moderate at 2.75%, creating an interesting divergence in inflation trends.

What Is WPI Inflation?

The Wholesale Price Index (WPI) measures price changes at the wholesale or producer level. It tracks prices of goods before they reach consumers.

Major components of WPI,

• Primary Articles
• Fuel & Power
• Manufactured Products

WPI is released by the Ministry of Commerce and Industry. Unlike CPI, it is not the primary inflation target for the Reserve Bank of India, but it reflects producer-level price pressures.

Why Did WPI Inflation Rise in January 2026?

The rise to 1.81% (from 0.83% in December 2025) was mainly due to,

• Higher prices of manufactured basic metals
• Increase in textiles and food products
• Rise in non-food articles
• Food inflation turning positive

The inflation rate last year in January 2025 was 2.51%, indicating that while inflation has risen recently, it remains lower compared to last year.

Food Inflation Turns Positive

Food articles inflation rose to 1.55% in January from -0.43% (deflation) in December.

Vegetable prices saw a sharp jump,

• 6.78% inflation in January
• Compared to -3.50% contraction in December
• This turnaround in food inflation contributed significantly to the overall rise in WPI.

Manufacturing Inflation Strengthens

Manufacturing inflation increased to 2.86% in January from 1.82% in December.

Out of 22 manufacturing groups, most recorded price increases, including,

• Basic metals
• Food products
• Textiles
• Electrical equipment

This indicates firming factory-gate prices and potential cost pressures in the industrial sector.

Non-Food Articles and Crude Oil Impact

• Non-food articles inflation rose sharply to 7.58% from 2.95% in December.
• Crude petroleum and natural gas prices also registered month-on-month gains. This could impact future fuel and production costs if the trend continues.

Fuel and Power Remain in Deflation

Unlike other segments, fuel and power remained in deflation at -4.01%.

Month-on-month trends,

• Electricity prices fell by 2.91%
• Mineral oil prices dropped 1.68%
• Coal prices rose marginally

Lower fuel prices helped limit the overall inflation surge.

Retail Inflation (CPI) at 2.75%

• India’s CPI inflation stood at 2.75% in January 2026, according to the Ministry of Statistics and Programme Implementation.
• The RBI targets CPI inflation (not WPI) for monetary policy.

The Reserve Bank of India has,

• Cut repo rate by 125 basis points in the current fiscal year
• Recently kept the benchmark repo rate unchanged at 5.25%

With CPI within comfort zone but WPI rising, the central bank will closely monitor price trends.

Question

Q. India’s WPI inflation in January 2026 stood at,

A. 0.83%
B. 1.55%
C. 1.81%
D. 2.75%