India’s Wholesale Inflation Hits 38-Month High of 3.88% as West Asia Crisis Drives Global Energy Costs

New Delhi: India’s wholesale inflation rose to a three-year high of 3.88 percent in March this year from 2.13 percent in February on the back of rising price pressures as global commodity costs rose due to ongoing tensions in West Asia. The increase in inflation is mainly due to crude oil and natural gas, other manufacturing items, food and non-food products, base metal manufacturing, etc., the government said on Wednesday. He said it was due to the increase in prices.

According to industry ministry data, wholesale price index, or WPI-based inflation, rose for the fifth consecutive month in March, as core inflation accelerated due to the slackening of basic food items. According to Ministry data, “WPI inflation was 2.13 percent in February and 2.25 percent in March last year.”

The positive inflation rate in March 2026 is primarily due to crude oil and natural gas, other manufacturing products, non-food products, base metal manufacturing and food products, etc. due to increases in prices. “Inflation in the fuel and energy basket increased from 3.78 percent deflation in February to 1.05 percent in March.”

According to data, crude oil inflation rose to 51.57 percent in March, compared to 1.29 percent deflation in the previous month. “Similarly, manufacturing industry inflation increased from 2.92 percent in February to 3.39 percent in March.”

Commenting on WPI inflation, Rahul Agrawal, senior economist at Icra Ltd, said inflation had almost doubled to 3.9 per cent in March 2026, a 38-month high, and was largely pressing in line with Icra’s expectations. “Although the increase was broad-based, there was a significant hardening in the annual inflation rates of crude oil and natural gas and fuel and energy groups, reflecting the impact of the increase in global energy prices due to the West Asian crisis,” Agrawal said.

In its research note, Barclays also said March WPI was the sharpest monthly increase since August 2023. “We expect WPI inflation to rise further in the future as global energy prices remain high and will eventually trickle down to other commodity prices,” Barclays said, adding that it expects the RBI to continue with a pause in interest rates until 2026.