India to unveil revamped WPI, producer price indices on 15 June

India’s Revised WPI and PPI Framework Set for June Launch

India to unveil revamped WPI producer – On 15 June, the Indian government plans to release an updated Wholesale Price Index (WPI) and a suite of new Producer Price Indices (PPIs), signaling a significant transformation in the way producer inflation is tracked across the country. This overhaul, which includes expanding the commodity basket and updating the weighting system, aims to align the nation’s economic indicators more closely with global standards. The move follows months of preparation, with the revision methodology officially approved by the relevant authorities in mid-May.

New Base Year and Expanded Commodity Basket

The revised WPI will adopt a base year of 2022-23, replacing the previous 2011-12 framework. This shift is expected to improve the accuracy of inflation measurements by incorporating a broader range of goods and services. According to the Department for Promotion of Industry and Internal Trade (DPIIT), the new series will be unveiled by the Office of the Economic Adviser on the specified date. The updated basket now covers 957 commodities, a marked increase from the earlier 697 items, reflecting the growing diversity of India’s economic activities.

Structural Changes to Categories and Weighting

A key aspect of the revision involves reclassifying certain items into more appropriate categories. For instance, crude petroleum and natural gas have been moved from the ‘Primary Articles’ group to the ‘Fuel and Power’ category, enhancing their alignment with other energy sources like coal and electricity. This adjustment is designed to better capture the dynamics of the energy market and provide a more accurate representation of inflation trends in this sector.

Additionally, the weighting system for the index has been revised. Instead of using the net traded value approach, the new methodology will base weights on the gross value of output (GVO), a method that the government claims more effectively highlights the economic importance of each commodity from a producer’s perspective. This change is part of a broader effort to modernize the index and make it reflective of current market conditions.

Improved Data Handling and Methodology

The new WPI series will also introduce a more refined approach to compiling data. For example, the elementary indices will now use a short-term chain-based method, replacing the long-term formulation previously in place. This allows for more frequent updates and better tracking of price changes over time. Furthermore, the index will employ a ‘Targeted Mean Imputation’ technique to handle missing price data, ensuring continuity without relying on the carry-forward method used before.

The changes extend to the compilation of the Output Producer Price Index (OPPI) and Input Producer Price Index (IPPI). While the OPPI will be released monthly starting with May 2026, the trial IPPI for manufacturing will be published on an experimental basis from March 2026. This dual approach enables data quality assessment and gathers feedback from stakeholders before full implementation.

Transition Timeline and Back Series Data

Following the June release, the revised WPI and OPPI will be available monthly, with provisional data for May 2026 as the first report. A back series spanning April 2023 to April 2026 will also be introduced to provide historical context for analysis. The trial IPPI, however, will be published quarterly, starting from the fourth quarter of 2025-26, alongside back-series data from the first quarter of 2023-24 to the third quarter of 2025-26.

The government has calculated a linking factor to facilitate the transition between the old and new WPI series. This factor, derived from the geometric means of the 12-month indices, will be applied uniformly across all commodities and major groups, ensuring a smooth shift in the data without disrupting continuity.

Global Alignment and Continued Use of WPI

While the new framework incorporates global best practices, the existing WPI will remain in use for five years to allow time for adaptation. This is due to its widespread adoption in price-escalation clauses, which are common in contracts and agreements. The gradual phase-out of the old index ensures that stakeholders can transition to the PPI system without abrupt disruptions.

The transition to the PPI system is described as a step in line with international standards, particularly those of advanced economies. The International Monetary Fund (IMF) recommended this shift, emphasizing the need for a more producer-focused inflation measurement. This change is expected to enhance the precision of economic data for policymakers and analysts.

Economic Implications and Expert Insights

Experts have highlighted the significance of these revisions. Gaura Sengupta, chief economist at IDFC First Bank, noted that the updated indices will better capture newer products and services. “This revision ensures that emerging goods are included in the index,” she explained. “Notably, services inflation will now be measured at the producer level, which was previously only tracked at the consumer end.”

By integrating services into the producer price framework, the new indices provide a more comprehensive view of inflation across the economy. This is particularly important as services account for an increasingly large share of India’s GDP. The adjustments are expected to improve the reliability of inflation data, supporting more informed decision-making in both public and private sectors.

Implementation Process and Regulatory Oversight

The revision process was thoroughly reviewed by statistical authorities before its final approval. The methodology was first validated by the Technical Advisory Committee on Statistics of Price and Cost of Living, then presented to the National Statistical Commission for final ratification. This multi-step review ensures the robustness of the new indices and their alignment with international benchmarks.