India Wholesale Inflation Rises To 11-Month High Of 2.13% In February Amid Global Commodity Volatility

India’s wholesale price inflation accelerated in February, reaching its highest level in nearly a year as price pressures strengthened across manufactured goods and primary commodities. The increase came even as fuel prices continued to remain in deflation territory and global commodity markets experienced volatility linked to the ongoing conflict involving Iran. 

Manufactured Goods Push Inflation Higher 

According to government data, Wholesale Price Index (WPI) inflation rose to 2.13% in February, compared with 1.81% in January and 0.96% in December, indicating a gradual build-up of inflationary pressures in the economy. 

Manufactured products, the largest component of the WPI basket played the biggest role in the increase. Inflation in this category edged up to 2.92% in February, slightly higher than 2.86% in January and 2.03% in December. Price increases were observed across several segments, including basic metals, textiles, non-food articles, and other manufacturing goods. 

Food prices also contributed to the rise, with food inflation increasing to 1.85% in February from 1.41% in January. 

Primary Articles See Sharp Annual Increase 

Inflation in primary articles, which include agricultural produce and minerals, climbed significantly on a yearly basis to 3.27% in February, up from 2.21% in January and 0.21% in December. 

However, on a month-on-month basis, prices in this category actually declined 0.52%. The decline was mainly due to lower prices of food articles, which dropped 1.33%, and minerals, which fell 1.21%. In contrast, prices of crude petroleum and natural gas rose 4.17%, while non-food articles increased 0.83% during the month. 

Fuel Prices Remain In Deflation 

The fuel and power segment continued to exert downward pressure on wholesale inflation. Inflation in this category remained negative at –3.78% in February, although the contraction was slightly narrower than –4.01% recorded in January. In December, fuel inflation had stood at –2.31%. 

Despite the annual deflation, the fuel and power index registered a 1.17% rise on a month-on-month basis, suggesting some recovery in energy prices. 

Geopolitical Tensions Add Uncertainty 

Inflation expectations are also being influenced by geopolitical developments in West Asia. The ongoing conflict involving Iran, Israel and the United States has increased uncertainty around global oil supplies and commodity markets. 

Concerns have particularly centred around potential disruptions near the Strait of Hormuz, a critical shipping route through which nearly 20% of global oil trade passes. Any prolonged disruption in the region could affect energy prices and inflation trends globally. 

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Conclusion 

The latest WPI data signals a gradual rise in wholesale price pressures in India, largely driven by manufacturing and primary commodities, while fuel prices continue to moderate the overall inflation trajectory amid global uncertainty. 

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