The Wholesale Price Index (WPI) is a macroeconomic concept and an indicator that measures the average change in the prices of goods at the wholesale or producer level in India. It tracks price movements of commodities traded in bulk between businesses, before they reach the retail market, making it a key measure of supply-side inflation. The WPI was first published in India in 1942. It was created to monitor price movements that reflect supply and demand in industry, manufacturing, and construction, and to help in analyzing economic conditions.
The WPI is released monthly by the Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry. It is calculated using the Laspeyres formula, which compares current prices with base year prices using fixed weights. The commodities are grouped into three main categories: Primary Articles, Fuel and Power, and Manufactured Products. The WPI is used to adjust macroeconomic indicators like Gross Domestic Product (GDP) and is often used by businesses in contracts for price adjustment clauses.
The WPI is closely connected to the Consumer Price Index (CPI), which measures retail-level inflation, including services, while the WPI focuses only on goods at the wholesale level. Historically, the Reserve Bank of India (RBI) used the WPI for its policy decisions, but it has since shifted to using the CPI for inflation targeting.
The WPI has undergone significant recent changes. The base year was revised from 2011-12 to 2022-23. This revised series, which expands the basket of commodities from 697 to 957 items, is scheduled for release on June 15, 2026. Crucially, the government has announced that the WPI will be gradually phased out over five years and replaced by the more comprehensive Producer Price Index (PPI) framework, which aligns India with global best practices and International Monetary Fund (IMF) recommendations. The PPI will cover output, input, and services prices, which the WPI does not.