Higher Global Commodity Prices Drive Rise in WPI Inflation, Says Government
The government on Monday said that the increase in wholesale inflation during June was mainly the result of rising global commodity and energy prices. At the same time, it emphasised that a series of policy measures had helped keep retail inflation within the Reserve Bank of India's (RBI) prescribed target range.
Responding to a question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary stated that inflation based on the Wholesale Price Index (WPI) rose to 9.87 per cent in June from 9.68 per cent in May. He attributed the rise largely to higher prices of commodities traded in international markets.
According to the minister, the sharpest price increases were recorded in mineral oils and petroleum products, food items, basic metals, chemicals and chemical products. These sectors are particularly sensitive to fluctuations in global commodity and energy prices.
Chaudhary said the government had introduced several measures to control inflation and reduce the burden on consumers. These initiatives include maintaining adequate buffer stocks of essential commodities, releasing food grains into the market whenever necessary and making timely adjustments to trade policies to ensure sufficient domestic supplies.
The minister noted that these interventions had played an important role in keeping Consumer Price Index (CPI)-based retail inflation below the government's medium-term target of 4 per cent during the previous two quarters.
According to official data, retail inflation averaged 3.1 per cent during the January-March quarter of the 2025-26 financial year and stood at 3.9 per cent during the April-June quarter of the 2026-27 financial year. ALSO READ: Net FDI declines to $6.95 billion in FY26 due to higher foreign investor repatriation, govt tells Parliament
Chaudhary also pointed out that the Centre periodically reviews inflation targets in consultation with the RBI every five years to maintain a balance between economic growth and price stability.
He further noted that the government decided on March 25, 2026, to retain the CPI inflation target at 4 per cent, along with a tolerance band ranging from 2 per cent to 6 per cent, for the period between April 1, 2026, and March 31, 2031.
Although retail inflation has remained within the prescribed range, recent data indicate an increase in price pressures. India's CPI inflation climbed to a provisional 4.38 per cent in June 2026 from 3.93 per cent in May, mainly because of higher food and transportation costs.
