ICRA estimates that wholesale inflation will remain elevated in July 2026
In June 2026, India's wholesale price index (WPI)-based inflation rose to 9.9%, up from 9.7% in May 2026, marking a recent high. This increase is primarily driven by the food segment, while core wholesale inflation, though still high at 7.5%, eased slightly amid softer commodity prices.
Highlights
- ICRA assesses that annual WPI inflation will remain at a high level of 9.0% in July 2026.
- The food segment contributed 43 basis points to the increase in headline WPI inflation in June 2026.
- Tensions in West Asia and volatility in global commodity prices are creating upside risks for wholesale prices in July 2026.
This article was translated from the original. Read the original version by our correspondent here.
Price Trends for June and July 2026
According to ICRA, the surge in headline WPI inflation in June 2026 is not broad-based, with the food segment contributing 43 basis points to the month-on-month increase from May to June 2026. The agency notes that core WPI inflation, based on non-food manufactured products, softened somewhat in June 2026, reflecting a sequential decline in commodity prices.In early July 2026, wholesale prices of most food items appear somewhat firmer year-on-year compared to June 2026. This suggests that WPI-food inflation could rise further in the current month.
Commodity Prices and Risk Scenario
ICRA assesses that annual WPI inflation in July 2026 will remain at a high level of 9.0%. Although global commodity prices, including oil, have cooled somewhat in July 2026 compared to June 2026, renewed tensions in West Asia have led to a rebound in prices in recent trading sessions.This situation creates upside risks for wholesale prices, especially as food inflation remains under pressure. As a result, it becomes important for industry, lenders, and investors to closely monitor cost trends.
In our previous report based on June 2025 trade data, it was noted that India's merchandise trade deficit widened to $30.4 billion due to a sharp rise in imports, even as exports posted double-digit growth. The surge in imports of fertilizers, pulses, raw cotton, and crude oil/petroleum products was identified as a key factor increasing the import bill and external payment pressures, while the services surplus was not sufficient to offset the overall deficit.
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