India’s wholesale price inflation continued its upward trajectory for the third consecutive month, rising to 1.81 percent in January 2026, according to official data released on February 16, 2026. The increase was primarily driven by higher prices of food articles, non-food articles and manufactured products, even as deflation persisted in the fuel and power segment.

The latest data shows that inflation measured by the Wholesale Price Index (WPI) rose from 0.83 percent in December 2025 to 1.81 percent in January 2026. However, it remained lower compared to 2.51 percent recorded in January 2025, indicating that while price pressures are building gradually, they are not yet at alarming levels.

The steady increase in wholesale inflation reflects changes in producer-level prices and gives an early signal of possible future trends in retail inflation.

Understanding Wholesale Price Index

The Wholesale Price Index measures the average change in prices of goods at the wholesale level before they reach consumers. Unlike retail inflation, which reflects prices paid by consumers, WPI captures price movements at the producer or wholesale stage.

The index includes three major components:

1. Primary articles, which include food and non-food items

2. Fuel and power

3. Manufactured products

Changes in these categories influence overall wholesale inflation.

Food Articles Turn Positive

A key driver behind the January rise was food inflation. According to official data, inflation in food articles stood at 1.55 percent in January, compared to a deflation of 0.43 percent in December.

This shift from negative to positive territory indicates a clear reversal in food price trends.

Within food items, vegetables showed significant volatility. Vegetable inflation rose to 6.78 percent in January, compared to a deflation of 3.50 percent in December. Such sharp swings are often linked to seasonal supply disruptions, weather patterns and transportation costs.

Food prices have a direct impact on household budgets, especially in India where a large portion of income is spent on essentials. While wholesale data does not directly translate into consumer prices immediately, sustained increases can influence retail markets over time.

Surge in Non-Food Articles

Inflation in the non-food articles category jumped sharply to 7.58 percent in January, compared to 2.95 percent in December.

Non-food articles include items such as oilseeds, fibres and raw materials used in manufacturing. A spike in this category often signals increased input costs for industries.

Higher raw material prices can eventually lead to increased production costs, which may be passed on to consumers in the form of higher retail prices.

The rise in non-food inflation suggests that cost pressures are building at the upstream level.

Manufactured Products Show Uptick

Inflation in manufactured products increased to 2.86 percent in January, up from 1.82 percent in December.

The Industry Ministry stated that the positive rate of inflation was primarily due to an increase in prices of:

• Basic metals

• Other manufacturing segments

• Textiles

• Food articles

• Non-food articles

Manufactured products form a large portion of the WPI basket. An increase in this category indicates stronger pricing power among producers or higher input costs being reflected in output prices.

Basic metals, in particular, are sensitive to global commodity trends. Fluctuations in international metal prices can influence domestic wholesale rates.

Continued Deflation in Fuel and Power

In contrast to rising prices in other segments, the fuel and power category remained in deflation, registering a negative inflation rate of 4.01 percent in January, compared to 2.31 percent in December.

Lower fuel prices help offset inflationary pressures in other areas, as fuel is a key input for transportation and logistics.

Deflation in fuel suggests either soft global crude oil prices or domestic pricing adjustments. This has helped moderate overall wholesale inflation.

However, if global energy prices rise in coming months, this segment could quickly shift and add to inflationary pressures.

Comparison With Retail Inflation

Retail inflation, measured by the Consumer Price Index (CPI), stood at 2.75 percent in January, according to data released earlier.

Retail inflation reflects prices directly paid by consumers and is closely monitored by policymakers.

Although wholesale inflation is rising, retail inflation remains relatively moderate. The gap between WPI and CPI indicates that wholesale price increases have not yet fully translated into consumer-level inflation.

However, sustained increases in wholesale prices could eventually impact retail markets.

RBI Policy and Interest Rates

The Reserve Bank of India (RBI) primarily tracks retail inflation when deciding policy interest rates.

In the current fiscal year, the RBI has reduced policy interest rates by 1.25 percentage points, as inflation remained low.

Earlier this month, the central bank retained key policy interest rates at 5.25 percent, signalling a cautious approach amid evolving inflation trends.

The RBI’s decision reflects a balance between supporting economic growth and controlling inflation.

If wholesale inflation continues to rise and begins influencing retail inflation, monetary policy decisions could be revisited.

What the Data Signals

The January data suggests a gradual build-up of price pressures at the wholesale level.

The third consecutive monthly increase indicates that the downward trend seen earlier has reversed.

Key signals include:

• Rising food prices

• Increased cost of raw materials

• Higher manufacturing output prices

• Persistent fuel deflation providing partial relief

The overall inflation rate of 1.81 percent remains moderate by historical standards. However, the trend direction is important.

If food prices continue to rise, they could exert pressure on retail inflation. Similarly, sustained increases in manufactured goods could impact consumer prices.

Economic Implications

Wholesale inflation affects multiple aspects of the economy.

For businesses, rising input costs can squeeze profit margins unless passed on to customers.

For consumers, sustained inflation can reduce purchasing power.

For policymakers, inflation trends influence decisions on interest rates, liquidity management and fiscal planning.

The current level of inflation suggests a stable but cautious environment.

Impact on Key Sectors

Agriculture

The rise in food inflation indicates improving price realisation for farmers. After a period of deflation, higher prices may support rural incomes.

However, sharp volatility in vegetable prices highlights the need for better supply chain management.

Manufacturing

Higher inflation in manufactured goods may reflect improved demand conditions or rising raw material costs.

Industries dependent on basic metals and textiles may experience cost adjustments.

Energy and Fuel

Continued deflation in fuel offers relief to transportation and logistics sectors. This can help control overall inflationary pressures.

Outlook Ahead

Looking forward, inflation trends will depend on several factors:

• Weather conditions affecting crop output

• Global commodity prices

• Crude oil price movements

• Supply chain efficiency

• Domestic demand levels

If food prices stabilise and fuel remains subdued, wholesale inflation may stay within manageable levels.

However, any external shock such as global commodity spikes could alter the scenario.

Broader Economic Context

India’s economic growth remains resilient, supported by domestic demand and infrastructure spending.

Moderate inflation provides room for economic expansion without overheating.

The current wholesale inflation level of 1.81 percent suggests that price pressures are present but controlled.

The difference between January 2025 inflation at 2.51 percent and January 2026 at 1.81 percent also indicates that inflation has not reached previous highs.

Conclusion

India’s wholesale price inflation rose to 1.81 percent in January 2026, marking the third consecutive monthly increase. The rise was driven mainly by higher prices in food articles, non-food articles and manufactured goods.

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