India will launch a new Producer Price Index (PPI) and roll out a revised Wholesale Price Index (WPI) series from June 15, marking one of the most significant overhauls of the country's inflation measurement framework in more than a decade.
The Department for Promotion of Industry and Internal Trade (DPIIT) said the base year for the WPI has been revised from 2011-12 to 2022-23, while new series of Output Producer Price Index (OPPI), Trial Input Producer Price Index (IPPI) and Service Producer Price Index (Service PPI) will also be introduced.
The move is aimed at aligning India's inflation statistics with global best practices followed by advanced economies and improving the measurement of price trends across a rapidly changing economy.
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The revised WPI series, which will replace the existing 2011-12 base year series, expands the number of commodities covered to 957 from 697. It also incorporates renewable energy sources such as solar and wind power, along with nuclear electricity, reflecting the evolving composition of India's energy sector.
In another key change, crude petroleum and natural gas have been shifted from the 'Primary Articles' category to the 'Fuel and Power' group, creating a more integrated framework for tracking energy prices.
The government has also updated the methodology used to calculate the index. Weights in the revised WPI are now based on Gross Value of Output (GVO), replacing the earlier approach based on net traded value. Officials said the change better reflects the economic significance of commodities from a producer's perspective.
The introduction of the Producer Price Index marks a broader shift in how producer-level inflation is measured. Unlike the WPI, which primarily tracks prices of goods at the wholesale level, the PPI framework captures prices received by producers and extends coverage to services as well, a sector that contributes more than half of India's gross domestic product.
Initially, Service PPIs will cover seven sectors — banking, securities transactions, insurance, pension fund management, railways, air passenger services and telecom. Additional services are expected to be added in subsequent phases as data availability improves.
The transition to the new framework will be gradual. Given the widespread use of WPI in commercial contracts and price escalation clauses, the government will continue publishing the WPI alongside the new PPI series for five years before discontinuing it.
The move forms part of a wider effort to modernise India's official statistics. Over the past year, the government has revised the base years for key macroeconomic indicators, including GDP, the Consumer Price Index (CPI) and the Index of Industrial Production (IIP), to better reflect current consumption and production patterns.
Economists say the PPI could provide policymakers with an earlier indication of inflationary pressures by tracking changes in producer prices before they reach consumers. The new index is also expected to help distinguish more effectively between supply-side shocks and demand-driven inflation.
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The broader coverage of the PPI may also improve the accuracy of economic growth estimates by providing a more comprehensive measure for adjusting nominal output for inflation. With services accounting for a growing share of economic activity, analysts have long argued that relying solely on a goods-focused wholesale price index left gaps in measuring producer-level inflation.
The revised WPI and Output PPI for May 2026, along with back-series data from April 2023, will be released on June 15.
What's changing in the new WPI series?
1. Wider coverage of commoditiesThe number of items tracked under the Wholesale Price Index has increased to 957 from 697, aiming to better reflect the current structure of the economy.
2. Renewable energy enters the basket
For the first time, solar and wind power have been included under the electricity category. Nuclear electricity has also been added to the index.
3. New approach to tracking energy prices
Crude petroleum and natural gas have been moved from the 'Primary Articles' category to the 'Fuel and Power' group, bringing them alongside coal, electricity and petroleum products for a more integrated view of energy price movements.
4. Weights based on domestic production
The revised series uses Gross Value of Output (GVO) to assign weights, replacing the earlier net traded value approach. The government says this better reflects the importance of commodities from a producer's perspective.
5. Modernised calculation method
The index will now use a chain-based short-term formulation method instead of the long-term formulation used in the previous series, aligning the methodology more closely with international practices.
6. Better handling of missing data
The revised WPI adopts a 'Targeted Mean Imputation' technique for missing prices, replacing the 'carry-forward' method used earlier.
7. Linking factor introduced
A linking factor has been created to enable comparisons between the old and new WPI series during the transition period. It has been calculated using the geometric mean of indices for FY25 and will be available for all commodities and major groups.
