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India's Wholesale Inflation Rises To Three-Decade High Of 15.08% In April

India's Wholesale Price Index stood at 15.08% in April—the highest in three decades.

<div class="paragraphs"><p>Automobile parts factory in Thane District of Maharashtra.&nbsp;(Photographer: BQ Prime)</p></div>
Automobile parts factory in Thane District of Maharashtra. (Photographer: BQ Prime)

India’s wholesale inflation spiked on costlier food articles, manufactured products, and fuel and power.

Inflation, as measured by the Wholesale Price Index, stood at 15.08% in April compared with 14.55% in March, according to data released by the Ministry of Commerce and Industry on Tuesday.

That, Rahul Bajoria, chief economist at Barclays, said, is the highest in more than three decades.

The gauge rose 2.08% over the previous month compared with a 2.41% decline in March.

This increase was driven by a sharp pickup in food prices, which reversed four months of declines, Bajoria said. Price rises in manufactured products and fuels were also strong in April, he said.

According to Aditi Nayar, chief economist at ICRA Ltd., the core-WPI inflation reverted to a four-month high of 11.1% in April, with producers forced to pass on the input price pressures. The heatwave led to a spike in prices of perishables such as fruits, vegetables and milk, which along with a surge in tea prices pushed up the primary food inflation, she said.

With some correction in commodity prices as a result of the bleaker demand outlook in China offsetting the depreciation in the rupee, the WPI inflation may recede mildly below 15% in May, while remaining uncomfortably elevated, said Nayar.

WPI Inflation Internals (Year-On-Year)

  • Inflation in manufactured products—the largest component of the index—stood at 10.85% compared with 10.71% in March.

  • Primary articles inflation stood at 15.45% compared with 15.54% in the previous month.

  • Inflation in food articles was at 8.35% against 8.06% in the previous month.

  • Vegetables inflation stood at 23.24% compared with 19.88% in the previous month.

  • Inflation in non-food articles was at 23.81% against 25.41% in March.

  • Fuel and power inflation stood at 38.66% against 34.52% in March.