Wholesale Price Inflation Hits 3.88% in March Amid Global Crises

Wholesale Price Inflation Trends

In New Delhi, wholesale price inflation has increased for the fifth consecutive month, reaching 3.88% in March. This rise is attributed to significant increases in fuel, power, and manufactured goods prices, influenced by the ongoing crisis in West Asia, as reported by government data on Wednesday. The Wholesale Price Index (WPI) recorded an inflation rate of 2.13% in February and 2.25% in March of the previous year.

The industry ministry noted that the inflation rate in March 2026 was primarily driven by higher prices in crude petroleum and natural gas, various manufactured goods, non-food articles, basic metals, and food items.

According to WPI statistics, the inflation rate for the fuel and power sector surged to 1.05% in March, a significant increase from the deflation of 3.78% observed in February. Crude petroleum prices saw a dramatic rise of 51.57% in March, contrasting with a deflation of 1.29% in the previous month. Additionally, inflation for manufactured products climbed to 3.39% in March, up from 2.92% in February.

On the other hand, the increase in food article prices moderated to 1.90% in March, down from 2.19% in February. Specifically, vegetable prices saw a decrease in inflation to 1.45% in March, compared to 4.73% in February.

The crisis in West Asia, particularly following the US-Israel attack on Iran, has led to a significant rise in global crude oil prices, which have surged over 50% since the crisis began on February 28. In response, the government announced a reduction in excise duty by Rs 10 per litre on petrol and diesel on March 26, aiming to prevent fuel retailers from passing on the increased crude oil costs to consumers.

This decision was made in light of the rapid escalation in international crude oil prices, which jumped from around USD 70 per barrel to approximately USD 122 per barrel within a month, marking a nearly 75% increase in less than four weeks due to the ongoing conflict in West Asia and its impact on global energy supply chains.

Furthermore, consumer price index-based retail inflation rose to 3.4% in March, compared to 3.21% in the previous month, largely driven by increases in certain food items, as indicated by data released earlier this week. The Reserve Bank of India (RBI) maintained its interest rates in its first bi-monthly monetary policy meeting earlier this month, primarily focusing on retail inflation to guide its benchmark lending rates.