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🗞️ Why in News: The Department for Promotion of Industry and Internal Trade (DPIIT) will launch India’s first-ever Producer Price Index (PPI) and a revamped Wholesale Price Index (WPI) — both with 2022-23 as the base year — on June 15, 2026. The new indices represent India’s most significant overhaul of inflation measurement in over a decade and bring India closer to international best practices.

The New Indices at a Glance

Index Description
Output PPI (monthly, goods) Measures prices received by domestic producers for their output — a seller-side price index
Input PPI (monthly, goods, trial) Measures prices paid by producers for their inputs (raw materials, energy)
Services PPI (quarterly, trial) Measures price movements in service sectors — India’s first services inflation measure
Revamped WPI WPI base year shifted from 2011-12 to 2022-23

What is a Producer Price Index?

Feature WPI PPI
Concept Measures average change in prices of goods at the wholesale/transaction level Measures price changes received by domestic producers
Coverage Goods only (primary goods, manufactured goods, fuel) Goods AND (eventually) services
Who uses it Used as business cost indicator, government contracts International standard (used by US BLS, Eurostat, IMF)
Trade coverage Includes import prices Usually excludes import prices (focuses on domestic production)

Key difference: PPI focuses on the producer’s perspective (what they receive), while WPI captures transaction prices in the wholesale market. PPI aligns with the IMF’s Producer Price Index Manual (the global standard).

Why This Change Now?

  1. WPI base year is outdated — the 2011-12 base year no longer reflects India’s current industrial structure; the new 2022-23 base captures post-COVID supply-chain shifts, the EV sector, renewable energy, and new sectors.
  2. Global alignment — almost all developed economies use PPI, not WPI; international comparisons and “inflation pass-through” analyses require PPI.
  3. Services gap — India’s GDP is ~55% services, yet until the services PPI launch, inflation in services was tracked only through the CPI (consumer side). The PPI services component measures producer-side service price movements.
  4. Policy precision — understanding how input cost inflation (input PPI) passes through to output prices (output PPI) and then to consumer prices (CPI) helps the RBI model inflation dynamics better.

How WPI, PPI, and CPI Relate

Raw material/commodity prices
       ↓
   INPUT PPI (producer pays)
       ↓
  OUTPUT PPI (producer receives)
       ↓
     WPI (wholesale trade level)
       ↓
     CPI (consumer pays)

Who Compiles What?

Index Compiler
CPI (Consumer Price Index) NSO (National Statistical Office), MoSPI
WPI (Wholesale Price Index) Office of the Economic Adviser (OEA), DPIIT, under Ministry of Commerce and Industry
New PPI DPIIT (with MoSPI collaboration)
IIP (Index of Industrial Production) NSO, MoSPI

UPSC Relevance

Paper Relevance
GS3 Indian economy — inflation indices; WPI vs CPI vs PPI; base-year revision; inflation measurement
Prelims WPI compiler = DPIIT/OEA (Ministry of Commerce); CPI = NSO/MoSPI; new base year 2022-23; PPI first launch India 2026; services PPI first ever

Facts Corner

📌 Facts Corner — Knowledgepedia

New PPI + Revamped WPI (June 15, 2026):

  • Compiled by: DPIIT (under Ministry of Commerce and Industry)
  • New base year: 2022-23 (WPI revised from 2011-12)
  • Three new series: Monthly Output PPI (goods), Trial Monthly Input PPI (goods), Quarterly Services PPI (India’s first!)

PPI vs WPI:

  • PPI = price received by domestic producer (international standard)
  • WPI = wholesale transaction price; India-specific; goods only
  • PPI aligns with IMF PPI Manual

Who compiles India’s indices:

  • CPI → NSO, MoSPI
  • WPI → OEA, DPIIT (Ministry of Commerce)
  • IIP → NSO, MoSPI

Sources: DPIIT, Business Standard, PIB

Source: India to Launch Producer Price Index and Revamped WPI — June 15, 2026 — Ujiyari.com | Free UPSC & State PCS Current Affairs