India’s manufacturing inflation climbed to 2.86% in January 2026, pushing wholesale price inflation to 1.81% year-on-year. The increase was driven by higher costs in textiles and apparel, while food prices also firmed. Fuel costs, however, declined sharply, balancing overall inflationary pressures. The government released the official data.
Key Highlights & Developments
India’s wholesale price inflation (WPI) firmed up in January 2026, rising to 1.81% year-on-year compared to 0.83% in December. A major driver was manufacturing inflation, which accelerated to 2.86% from 1.82% in the previous month.
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Manufacturing Inflation: The uptick was led by textiles (2.48% vs 1.68%) and wearing apparel (2.08% vs 1.55%), reflecting stronger demand and cost pressures in industrial production.
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Food Prices: Inflation in food items rose to 1.41% after showing no growth in December, signaling renewed upward momentum in essential commodities.
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Fuel Costs: In contrast, fuel prices dropped sharply by 4.01%, the steepest decline since October 2024. LPG, petrol, and diesel all recorded significant deflation, easing some of the inflationary burden.
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Overall Impact: On a monthly basis, wholesale prices increased by 0.51%, matching December’s pace. The data suggests that while manufacturing and food inflation are firming, falling fuel costs are cushioning the broader economy.
Contextual Note: The Reserve Bank of India primarily tracks consumer price inflation for policy decisions, but wholesale inflation trends provide critical insights into cost pressures faced by businesses. January’s figures highlight a mixed inflation environment—rising manufacturing costs offset by energy deflation.
Sources: Government of India inflation data; Mint coverage; Reuters market updates