India has officially initiated the phase-out of its Wholesale Price Index (WPI), introducing a new Producer Price Index (PPI) to capture price movements closer to the factory gate.
The government released the first set of PPI data on June 15, marking the start of a five-year transition period during which both indices will run in parallel to allow businesses and policymakers to adjust to the new methodology.
The shift represents a significant overhaul of India’s inflation measurement framework.
By focusing on producer-level prices, the new index is designed to provide a more accurate reflection of cost-push dynamics within the manufacturing sector, offering a clearer signal for monetary policy decisions than the broader WPI.
This move aligns India with global standards, where PPI is widely regarded as a leading indicator for consumer price inflation.
The introduction of the PPI comes as global markets closely monitor inflation trends across emerging economies.