WPI to PPI shift: India rolls out new 2022-23 base

What the government is changing

India is set to overhaul how it measures producer-level inflation by gradually replacing the Wholesale Price Index (WPI) with a broader Producer Price Index (PPI) framework. Officials said the new approach is designed to better capture how price pressures build up and move through the economy. Unlike WPI, which is widely used as a proxy for wholesale inflation, the new system is planned to track output prices, input costs, and service-sector price movements. The government has made it clear the change will be phased in, not abrupt, to avoid disruption for users who rely on WPI.

June 15 rollout: revised WPI plus new PPIs

The Department for Promotion of Industry and Internal Trade (DPIIT) will release the revised WPI series on June 15 with a new base year of 2022-23. Alongside it, DPIIT will publish India’s first Output Producer Price Index (OPPI), a Trial Input Producer Price Index (IPPI), and a Service Producer Price Index (Service PPI), officials said. The new WPI base year will be revised from 2011-12 to 2022-23. Officials also indicated that the first print of the revised WPI series will be released for May, along with a back series starting April 2023.

A five-year parallel run before WPI is retired

The transition will run on a dual-track model. Principal Economic Adviser Praveen Mahto said WPI and PPI will operate in parallel for five years, after which WPI is expected to be discontinued. The commerce and industry ministry said the five-year window is intended to give users time to shift, especially because WPI is heavily embedded in commercial practices. In particular, WPI is commonly referenced in price escalation clauses in contracts, making a sudden switch difficult. The ministry said WPI will continue to be released during the transition period and will be discontinued after that.

What is included in the new PPI framework

The new system expands the scope of producer price measurement in three directions. First, it introduces an OPPI to track output prices. Second, it adds a trial IPPI to capture input cost movements. Third, it launches a Service PPI covering seven services: banking, securities transaction, insurance, management of pension funds, railways, air (passenger), and telecom.

Officials said the Service PPI will be released quarterly. DPIIT representatives also said efforts are underway to expand coverage to more service sectors over time.

Why the shift matters for inflation tracking

Officials said the new framework aims to provide a more realistic assessment of inflationary trends, especially by incorporating price dynamics beyond goods. WPI has traditionally been used to gauge producer-level inflation, but it does not capture the full set of price pressures faced by businesses across the economy. By separately measuring output prices, input costs, and service-sector inflation, the PPI system is intended to offer a more detailed picture of inflation transmission across industries. That matters for understanding how input cost changes may translate into output prices, and how pricing pressure may differ between manufacturing and services.

Alignment with global practice and IMF guidance

The government has positioned the shift as part of an effort to modernise India’s inflation and pricing data framework. Officials said the move aligns India with practices followed by advanced economies. It also follows recommendations of the International Monetary Fund (IMF), as referenced by officials in the briefing. The stated objective is a more globally aligned producer-price measurement framework that can be compared more consistently with other economies.

What it means for businesses and contracts

A key reason for the long transition is the widespread use of WPI in business contracts. The ministry explicitly cited price escalation clauses as a reason WPI will continue to be published for five years from the release of the revised series. For companies, this parallel period creates a buffer to review contract language and internal pricing frameworks that currently reference WPI. For procurement teams and vendors, the availability of both indices could also enable a gradual shift in how pricing adjustments are calculated, rather than forcing immediate renegotiations.

Market impact: where investors may feel the change

This is primarily a data and policy framework change, but it can affect how market participants interpret inflation signals. With new readings for output, inputs, and services, investors may get a more granular view of cost pressures faced by producers and service providers. Policymakers and analysts may also use the split indices to better separate cost-driven inflation from pricing power effects in different sectors.

The government’s plan to publish the revised WPI and the PPIs simultaneously for five years also reduces the risk of a sudden break in long-running time series that many businesses and analysts track.

Key facts at a glance

What to watch next

The next milestone is the June 15 release, when the revised WPI series and the first set of producer price indices are scheduled to be published. Officials have indicated the intention is a gradual shift, with WPI continuing alongside the new framework during the transition period. Over time, the extent to which businesses adopt OPPI, IPPI, and Service PPI in contracts and internal planning will determine how quickly the new system becomes the default reference. After the five-year period, the government expects PPI to replace WPI as the main producer-price measurement framework.