India's wholesale price index increased by 5.70 percent on the year in March, down from 6.55 percent in February. Despite this moderation in March, WPI inflation remains relatively high and well above levels seen over 2016, suggesting officials will remain concerned about the strength of price pressures. The index fell 0.11 percent on the month in March after an increase of 0.49 percent in February.
The drop in WPI inflation in March was mainly driven by wholesale prices for manufactured goods, which account for around 65 percent of the index. These prices rose by 2.99 percent in March, down from an increase of 3.66 percent in February, partly reflecting a smaller increase in the price of food products, down from 9.27 percent to 6.96 percent.
Wholesale fuel and power prices, which account for around 15 percent of the index, also rose at a slower pace at 18.16 percent, down from 21.02 percent. This was partly offset by an bigger increase in wholesale prices for food (around 14 percent of the index), which rose 3.12 percent on the year in March after an increase of 2.60 percent in February.
Consumer price index data released last week showed an increase in headline inflation from 3.65 percent in February to 3.81 percent in March.