India Shifts to Producer Price Index: WPI to be Phased Out in 5 Years

India has taken a monumental step in modernizing its economic monitoring by launching the Producer Price Index (PPI) for goods and services. This strategic move signals the beginning of a five-year transition period during which the long-standing Wholesale Price Index (WPI) will be gradually phased out.

A Strategic Shift Toward Global Standards

The decision to adopt the PPI aligns India with advanced global economies and follows critical recommendations from the International Monetary Fund (IMF). By transitioning away from the WPI, India aims to achieve a more precise measurement of price fluctuations from the perspective of producers.

This shift was prompted by a report from a working group led by former NITI Aayog member Ramesh Chand. The panel highlighted that the PPI—comprising both Output and Services indices—offers a superior framework for National Accounts and GDP compilation. Unlike the WPI, the PPI allows economists to better estimate real value addition and understand how cost changes at the producer level impact the broader economy.

Understanding the New PPI Framework: Input vs. Output

A significant feature of the new system is the distinction between Input PPI and Output PPI. The Ministry of Commerce and Industry noted that this dual approach provides a clearer picture of how inflation experienced by producers on raw materials (inputs) is passed through to the final products (outputs).

For the May 2026 period, the data revealed several key trends:

• All-India Output PPI: Stood at 109.6 in May 2026, up from 108.6 in April.
• Output PPI Inflation: Rose to 9.4% in May, compared to 8.1% in April.
• Manufacturing Input PPI: The experimental trial for the manufacturing sector recorded a value of 104.9 in May 2026.

The Ministry is currently publishing the Input PPI on an experimental basis to refine data quality and gather feedback from industry stakeholders before a full-scale rollout.

Composition and Weightage of the New Indices

The revised base year for both the WPI and PPI is 2022-23, covering a basket of 957 items. The weightage structure of the Output PPI (Goods) differs significantly from the old WPI, reflecting a more modern economic composition:

• 製造品: 69.93%（WPIの63.12%と比較）。
• 農林水産業: 22.16%（WPIの22.76%と比較）。
• 電気: 4.49%（WPIの14.11%と比較）。
• 採鉱・採石業: 3.42%。

サービスPPIの導入は段階的に実施されています。第1フェーズには、銀行、証券、保険、年金管理、鉄道、航空旅客輸送、通信などの重要セクターが含まれます。今後のフェーズでは、価格調査およびGSTNのデータを使用して、残りのサービスへと対象を拡大していく予定です。

主なポイント

• 段階的な移行: 卸売物価指数（WPI）は5年かけて完全に廃止され、生産者物価指数（PPI）に置き換えられます。
• 精度の向上: 新しいPPIフレームワークは投入価格と産出価格を区別しており、原材料コストが最終的な生産価格にどのように影響するかをより正確に把握できるようになります。
• ウェイトの近代化: 新しい指数は製造品（69.93%）に重点を置いており、GSTNのデータを通じてサービスセクターを組み込むための体系的な道筋を提供します。