New Delhi

Wholesale price index (WPI) inflation is expected to rise to a 21-month high of 3.2 per cent in March 2026, driven by rising food and commodity prices, according to a report by ICRA.

The report noted that inflationary pressures are building up amid an increase in global commodity prices, including crude oil, natural gas and edible oils, along with a fall in the USD/INR pair, which is exerting upward pressure due to India's high import dependence.

It stated "WPI inflation set to harden to 3.2 per cent in March 2026.... global commodity prices, including crude oil, natural gas and edible oils have rose considerably, which along with the fall in the USD/INR pair would exert an upward pressure on the WPI"

According to the report, more than half of the 22 food items, for which data is available, recorded higher year-on-year inflation in the first half of March 2026 compared to February 2026, contributing to the rise in wholesale inflation.

The report pointed out that India's reliance on edible oil imports exposes it to indirect price pressures arising from higher logistics and freight costs amid the ongoing West Asia conflict.

The report further stated that fuel items, including crude oil, natural gas and crude derivatives, have a weight of 10.4 per cent in the WPI basket. It estimates that for every 10 per cent increase in crude oil prices, WPI inflation could rise by around 80-100 basis points.

The report warned that high commodity and energy prices over a prolonged period could pose significant upside risks to its baseline forecast of an average WPI inflation of 2.7 per cent for FY2027.

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It also noted that WPI inflation had already been on an upward trajectory in recent months. The inflation rate rose to an 11-month high of 2.1 per cent in February 2026, up from 1.8 per cent in January 2026.

So the report indicated that rising global commodity prices, especially crude oil, along with supply disruptions and currency movements, are likely to keep wholesale inflation elevated in the near term.