India shifts from WPI to PPI

The Indian Ministry of Finance, through its India — Ministry of finance, has directed all ministries and departments to adopt the Producer Price Index (PPI) instead of the Wholesale Price Index (WPI) for price escalation clauses in future government procurement contracts. This move follows the launch of monthly PPI data for goods and services by the Ministry of Commerce and Industry in June, which aligns with international practices and recommendations from the International Monetary Fund (IMF). The transition aims to phase out WPI within five years, during which both indices will be released to allow users to switch. The new PPI series, with base year 2022-23, includes Output PPI, Input PPI, and Service PPI covering seven services initially. The revised WPI series also expanded its item basket from 697 to 957 items and reorganized certain commodity groups. This policy shift is expected to improve accuracy in reflecting producer-level price movements and align India's statistical practices with global standards.