Wholesale inflation rises to 3.88% in March on higher fuel, manufacturing costs

Wholesale price inflation continued its upward trend for the fifth consecutive month, reaching 3.88% in March, according to government data released on Wednesday.  

The rise was mainly driven by a sharp increase in prices of fuel, power, and manufactured goods amid the raging West Asia crisis. 

Inflation based on the Wholesale Price Index (WPI) stood at 2.13% in February and 2.25% in March last year. 

"Positive rate of inflation in March 2026 is primarily due to increase in prices of crude petroleum & natural gas, other manufacturing, non-food articles, manufacture of basic metals and food articles, etc.," the industry ministry said in a statement. 

Fuel and manufacturing costs push inflation higher 

Data showed that inflation in the fuel and power category moved into positive territory at 1.05% in March, compared to a contraction of 3.78% in February. Prices of crude petroleum saw a steep jump, with inflation surging to 51.57% from a negative 1.29% a month earlier. 

Manufactured products also became costlier, with inflation rising to 3.39% in March from 2.92% in February. 

However, food inflation showed some relief. The rate of increase in food article prices eased to 1.90% from 2.19% in the previous month. Vegetable prices, in particular, moderated, with inflation slowing to 1.45% from 4.73%. 

Global crude surge and policy response 

The surge in global crude oil prices, triggered by tensions in West Asia following the US-Israel attack on Iran, has played a key role in pushing up inflation. Crude oil prices have climbed more than 50% since the crisis began on February 28. 

To shield consumers from rising fuel costs, the government on March 26 cut excise duty by ₹10 per litre on both petrol and diesel. The move came after international crude prices surged sharply from about $70 per barrel to nearly $122 per barrel within a month, reflecting a steep rise of around 75% due to supply disruptions linked to the conflict. 

Meanwhile, retail inflation, measured by the Consumer Price Index (CPI), rose to 3.4% in March from 3.21% in February, largely due to higher prices of some food items. 

Earlier this month, the Reserve Bank of India kept interest rates unchanged in its first bi-monthly monetary policy, continuing to focus on retail inflation while deciding benchmark lending rates.