India's introduction of Producer Price Indices alongside a revised WPI marks a shift in price statistics. Examine the rationale and implications for macroeconomic policy.

In June 2026, the Office of the Economic Adviser (DPIIT) moved the base of the WPI to 2022-23 and widened its basket from 697 to 957 items. At the same time it launched an Output PPI, a trial Input PPI and a Service PPI [1]. India is moving from wholesale prices towards producer-price measurement, and that change affects how policy reads both growth and inflation.

Rationale

• Global alignment: The 2017 Working Group on PPI noted that PPI has replaced WPI in most countries. It also found PPI more consistent with the System of National Accounts (SNA) for use as a deflator [2].
• Stage-wise clarity: WPI puts crude oil, diesel and goods made using diesel in one basket, so one oil shock can show up more than once. Separate output and input indices keep these stages apart.
• Services gap: WPI covers only goods. The Service PPI now prices 7 services, including banking, railways and telecom [1].
• Current economic structure: Solar, wind and nuclear electricity have been added to the basket. Weights are now based on gross value of output [1].

Implications for macroeconomic policy

• Measuring real growth: MoSPI now deflates the IIP (2022-23) with Output PPI. This series replaces the WPI-deflated version released on 1 June 2026 [3]. GDP deflators may follow, which would make real growth estimates more accurate.
• Monetary policy: In September 2026, WPI inflation was 11.39% but CPI inflation was 5.54% [4][5]. The MPC targets CPI, so producer indices act as an early warning. Manufactured-products inflation rose from 8.37% to 9.76%, which suggests rising costs are moving into finished goods [4].
• Fiscal policy: Fuel & Power inflation at the producer stage was 25.85% [4]. It is being held back from consumers by a ₹10/litre excise cut on petrol and diesel [6]. PPIs show where the cost lands: on the budget and on oil marketing companies.
• Transition risks: WPI will run alongside PPIs for five years because contracts use it in price-escalation clauses [1]. Running two systems at once can confuse users. The Input PPI is still a manufacturing-only trial [1]. Provisional figures rest on an 83.4% response rate, so they may be revised [4].

The shift to PPIs brings India in line with global practice. It gives cleaner deflators and earlier signals of inflation. Next steps:

• take the Input PPI beyond manufacturing;
• add more services to the Service PPI;
• publish a clear link between the WPI and PPI series;
• coordinate data across DPIIT, MoSPI and RBI.

Reliable, timely data supports evidence-based policy and SDG target 17.18 on statistical capacity.