US-Iran war hits wholesale prices: WPI inflation rises to 3.88% in March as crude prices skyrocket

Data showed that inflation in the fuel and power category turned positive at 1.05 per cent in March. (AI image)

WPI inflation: India’s wholesale price index (WPI) inflation for the month of March rose to 3.88 per cent, according to government data released on Wednesday. The increase was largely driven by a sharp rise in prices of fuel, power and manufactured goods amid the West Asia crisis. This compares with 2.13 per cent in February and 2.25 per cent in March last year.In a statement, the industry ministry said the positive inflation rate in March 2026 was mainly due to higher prices of crude petroleum and natural gas, manufactured products, non-food articles, basic metals and food items.Data showed that inflation in the fuel and power category turned positive at 1.05 per cent in March, compared with a contraction of 3.78 per cent in February. Prices of crude petroleum recorded a sharp jump, with inflation surging to 51.57 per cent from a negative 1.29 per cent in February.Inflation in manufactured goods also increased, rising to 3.39 per cent in March from 2.92 per cent a month earlier. However, the pace of increase in food prices moderated slightly, with inflation in food articles easing to 1.90 per cent from 2.19 per cent. Within this category, vegetable inflation slowed to 1.45 per cent from 4.73 per cent in February.

Middle East Conflict Hits WPI

The rise in wholesale prices comes against the backdrop of the ongoing conflict in West Asia following strikes by the United States and Israel on Iran, which has pushed global crude oil prices higher. Oil prices have increased by more than 50 per cent since the crisis began on February 28.In response, the government cut excise duty by Rs 10 per litre on petrol and diesel on March 26 to prevent the rise in crude oil prices from being passed on to consumers. The decision followed a steep surge in international crude prices, which climbed from around $70 per barrel to nearly $122 per barrel within a month, marking an increase of about 75 per cent, driven by supply disruptions linked to the conflict.Separately, retail inflation based on the Consumer Price Index rose to 3.4 per cent in March from 3.21 per cent in February, mainly due to higher prices of certain food items, according to data released earlier.The Reserve Bank of India kept interest rates unchanged in its first bi-monthly monetary policy review this month. The central bank primarily uses retail inflation as a key factor in deciding benchmark lending rates.