“The impact of high global crude price was evident in the primary articles category that nearly doubled to 6.36 per cent in March from 3.27 per cent in February and 2.27 per cent in January. The inflation in crude petroleum recorded at 51.57 per cent, unlike deflation of – 1.29 per cent and -11.23 per cent in previous months,” Megha Arora, Director – Economics, India Ratings & Research, said.
“This reversal in crude inflation trajectory accompanied with the higher weightage assigned to it in the WPI basket exerted an upward pressure on the headline inflation. Fuel and power recorded a similar trajectory from deflation to inflation on account of higher price of petrol and high-speed diesel. In the manufacturing group, while several sub-groups witnessed inflation, food products, chemicals and textiles exerted upward pressure,” she added.
India Ratings expects WPI inflation in April 2026 to surge further to 4.7 per cent due to transmission of high energy prices and via its users, ie. the manufacturing sector.
WPI is expected to be higher than the Consumer Price Index (CPI) on account of greater weight of fuels in the WPI, it said.
A possible re-escalation in West Asia conflict leading to higher price of crude and edible oil, along with currency depreciation, will pose the upside risk to inflation. In the medium-term, El Nino effect is expected to increase food prices, the ratings firm added.
India Ratings maintains its view that higher inflation accompanied with supply chain disruptions and status quo on key policy rates will weaken GDP growth to less than 7 per cent in first quarter of FY27 compared to 7.8 per cent in 1QFY26 and 7.6 per cent (second advanced estimate) in FY26.
For more details, read here: https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2252109®=3&lang=1
