Despite a slight easing in July, India’s wholesale inflation is expected to stay high into FY27 due to persistent global and domestic price pressures, with limited impact on consumer inflation prospects.
India’s wholesale inflation is expected to stay high into FY27, even though the pace eased slightly in July, as low base effects, dearer food and fuel, and uncertain global energy prices keep pressure on producers, according to a report from ICICI Bank cited by ANI. The bank said the rise in wholesale costs is unlikely to feed through fully into consumer prices, with retail inflation seen remaining relatively subdued and average CPI inflation projected at 4.8% in FY27.
Official data showed wholesale price inflation at 9.8% year-on-year in July 2026, down marginally from 9.87% in June and far above the -0.8% recorded a year earlier. The month-on-month index slipped 0.2%, suggesting only a modest cooling after several months of firm price gains.
The easing in July came mainly from fuel and power, where inflation slowed to 20% from 27.4% in June. ICICI Bank said mineral oils inflation also moderated, while LPG, aviation turbine fuel and naphtha prices softened. Even so, the report flagged a risk from crude oil, noting that global benchmark prices have averaged $86.8 a barrel so far in FY27, above the FY26 average of $69.
Pressure was stronger in other parts of the wholesale basket. Primary articles inflation climbed to a 21-month high of 8.5%, led by a sharp rise in non-food articles, while food articles inflation held at 5.4%. Manufactured goods inflation rose to 8.3%, its highest in 28 months, with notable gains in chemicals, textiles, basic metals, rubber and plastics, electrical equipment and fabricated metal products. Producer prices also remained firm, with output PPI unchanged at 9.6%, the highest since April 2024. ICICI Bank said a stronger monsoon and better sowing could ease food inflation later in the fiscal year, but sustained crude strength would remain an upside risk.
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