Manufacturers in India are raising selling prices at a faster pace than input costs, indicating strengthened pricing power and a shift in inflation measurement with new indices, despite sectoral disparities and market volatility.
Manufacturers in India were able to raise selling prices faster than their input costs in the first four months of the 2026-27 financial year, suggesting some protection against swings in raw material prices, according to Business Standard. The pattern was broadly favourable for producers: when output prices increased, they generally rose more quickly than input prices, and when they fell, they tended to decline less sharply. May was the exception, when the producer price index for manufactured goods rose more slowly than the input measure. Business Standard noted that the input series for manufactured products was released on a trial basis, so the figures should be read with caution.
The data were mixed across sectors. In the five largest manufacturing categories, month-to-month movements were volatile, with tobacco products and wearing apparel tracking the overall trend in three of the four months, while the other three categories lagged. That uneven picture matters because it suggests the apparent pricing advantage was not shared evenly across industry. The broad result, however, points to firms being able to defend margins better than they did four years ago, at least for most of the period covered.
The figures also arrive as India overhauls the way it measures producer inflation. The government has approved a new wholesale price index with a 2022-23 base year and is introducing producer price indices, which are designed to track input costs, factory-gate prices and, in some cases, services. Reuters has previously reported that the revised framework is intended to bring India closer to global practice, while Business Standard’s data coverage shows how the new system is beginning to illuminate pricing power at the factory level.
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