India’s wholesale price index (WPI)-based inflation climbed to 3.88% in March 2026, up from 2.13% in February, marking a 38-month high, according to data released by the Ministry of Commerce and Industry.
The surge was largely driven by rising prices of crude petroleum, natural gas, and manufactured products.
Fuel and Power Segment Drives Inflation
The fuel and power segment witnessed the sharpest movement:
- Month-on-month rise: 4.13%
- Shift from deflation (-3.78%) in February to inflation (1.05%) in March
- First positive inflation after 11 months of deflation
This increase was mainly attributed to the ongoing West Asia geopolitical tensions, which pushed up global energy prices.
Primary Goods Inflation at 14-Month High
Inflation in primary goods rose sharply to 6.36%, the highest in 14 months.
However, within this category:
- Food inflation showed moderation
- Prices softened in:
- Cereals
- Wheat
- Vegetables
- Onion and potato (deep deflation)
Manufactured Products See Significant Rise
The manufactured products segment, which carries the highest weight (64%+) in WPI, increased to 3.39%, a 40-month high.
This indicates rising input costs and pricing pressures across industries.
Core WPI Inflation Trends
According to ICRA:
- Core WPI inflation rose to 3.7% (41-month high)
- Indicates underlying inflationary pressure beyond volatile food and fuel
Comparison with Retail Inflation (CPI)
Retail inflation, measured by CPI, stood at:
- 3.4% in March 2026
- Slightly higher than 3.21% in February
Experts suggest WPI is more sensitive to global shocks like fuel prices, while CPI is relatively buffered.
Outlook for Inflation
Economists expect WPI inflation to rise further due to:
- Global energy price surge
- Higher freight and shipping costs
- Base effects
Forecasts:
- April 2026: ~4.8%
- FY27 average: ~3.5%–5%
Conclusion
The rise in WPI inflation signals increasing cost pressures in the economy, particularly from fuel and manufacturing sectors. If global uncertainties persist, inflationary trends may continue in the coming months.