Wholesale Price Index (WPI)

The Wholesale Price Index (WPI) measures the changes in the prices of goods at the wholesale level – before they reach the retail consumer. It is a key indicator used by policymakers to monitor inflation trends and take timely corrective actions. WPI reflects the average change in the price of a basket of wholesale goods across sectors such as primary articles, fuel and power, and manufactured products.

Key Features of WPI

• Base Year: 2022–23.
• Released by: Office of the Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.
• Frequency: Monthly.
• Release Date: 14th of the following month. If it is not a working day, the index is released on the next working day.
• Coverage: WPI measures price changes in goods and does not include services.
• Number of Items: 957 items.
• Price Basis: WPI is compiled using Basic Prices, which exclude net taxes and trade and transport margins.
• Weights: Gross Value of Output (GVO) has been used for preparing weights for WPI (2022-23) as compared to Net Traded Value i.e. GVO + Imports – Exports, used in WPI 2011-12 series

Major Components of WPI

The WPI basket is divided into three major groups.

• Primary Articles (Weight: 22.75730%)
  • Food Articles
  • Non-Food Articles
  • Minerals
• Fuel and Power (Weight: 14.11433%)
  • Coal and Lignite
  • Mineral Oils
  • Electricity
  • Crude Petroleum and Natural Gas
• Manufactured Products (Weight: 63.12837%): Includes a wide range of manufactured products, such as:
  • Manufacture of Food Products
  • Manufacture of Beverages.
  • Manufacture of Tobacco Products
  • Manufacture of Textiles
  • Manufacture of Wearing Apparel
  • Other Manufactured Products

*Important: Manufactured Products have the highest weight in WPI, followed by Primary Articles and Fuel and Power.

Uses of Wholesale Price Index (WPI)

• Measures Wholesale Inflation: WPI provides estimates of inflation at the bulk transactions level for the economy as a whole. This helps in timely intervention by the Government to check inflation.
• Deflator for Economic Indicators: WPI is used as a deflator for many sectors of the economy for estimating GDP. It is also used to deflate nominal values of production in compilation of Index of Industrial Production (IIP).
• Indexation of Business Contracts: WPI is used for indexation by users in business contracts.
• Investment Decisions: Global investors track WPI as one of the key macro indicators for their investment decisions.

WPI Food Index

• It measures the average change in wholesale prices of food commodities included in the Wholesale Price Index (WPI).
• It consists of ‘Food Articles’ from Primary Articles major group, and ‘Manufacture of Food Products’ from Manufactured Products major group.
• Weight: Approximately 24.99% of the overall WPI basket.

Key Highlights of the New Series of WPI (2022-23)

• Increased number of Items: The total number of items has increased from 697 to 957;
• Inclusion of New and Renewable Energy under Electricity: New sources of energy, such as Solar and Wind, have been added under ‘Electricity’ Group. In addition, Nuclear Electricity has been included in the basket;
• Coherent and Integrated Structure for Tracking Energy Prices: Crude Petroleum and Natural Gas has been shifted from the ‘Primary Articles’ to the ‘Fuel and Power. This reorganization would lead to better alignment, as this group already houses other major fuels such as coal, electricity, and petroleum products;
• Improved Methodology for Derivation of Weights: Gross Value of Output (GVO) has been used for preparing weights for WPI (2022-23) as compared to Net Traded Value i.e. GVO + Imports – Exports, used in WPI 2011-12 series since the weights based on GVO reflect the economic significance of commodities in a better way from the producer’s perspective, as they represent domestic production;
• Improved Computation Methodology: The elementary indices are being compiled using short-term formulation using chain-based method, in place of long-term formulation method (as practiced in the existing series; and
• Improved Method for Imputing Missing Price Data: ‘Targeted Mean Imputation’ method has been used, in place of ‘Carry-forward’ method being used in the existing series of WPI.
• Linking Factor: The Linking Factor has been computed as the ratio of geometric means of the twelve month indices of old and new series of WPI for the financial year 2024-25. This will be available for All Commodities and the Major Groups.

Transition from WPI to Producer Price Index (PPI)

On 15 June 2026, the government introduced three new Producer Price Indices alongside the revised WPI.

• Output Producer Price Index (OPPI)
• Trial Input Producer Price Index (IPPI)
• Service Producer Price Index (Service PPI)

Transition Timeline

• WPI and PPI will be published simultaneously for five years from 15 June 2026.
• WPI is scheduled to be discontinued after this transition period.
• PPI will replace WPI as part of India’s transition towards internationally accepted producer price measurement practices.
• The transition from WPI to PPI is in alignment with the global best practices adopted by advanced economies and the recommendations of the International Monetary Fund (IMF).