India to swap Wholesale Price Index for Producer Price Index

The Indian government will launch a new series of inflation indices on June 15, initiating a five-year transition from the Wholesale Price Index to a more comprehensive Producer Price Index system. The overhaul aims to modernize the country’s statistical framework and align it with global standards.

The Department for Promotion of Industry and Internal Trade will release a revised WPI with a new base year of 2022-23, replacing the current series based on 2011-12. Simultaneously, it will introduce three new Producer Price Indices: an Output PPI, a trial Input PPI for manufacturing, and a Services PPI. Officials stated the existing WPI will be published alongside the new indices for five years before being discontinued, allowing businesses and policymakers time to adapt.

The shift addresses long-standing calls from economists and international bodies like the International Monetary Fund for India to adopt a PPI framework. While the WPI tracks price changes for goods at the wholesale level, the new PPI system will cover both goods and services, providing a more detailed view of price movements across the production chain. The Output PPI measures prices received by producers,...