India Wholesale Price Index - Food y/y

The Wholesale Price Index (WPI) Food y/y measures changes in wholesale prices for the consumer food basket in the reported month compared to the same month a year ago. The index is calculated monthly to measure food inflation.

The index is calculated based on the cumulative WPI value of the food group in the Production section and the appropriate group in the primary goods section. Therefore, it is a derived index. Components are calculated relative to a reference period, which is currently set for 2011-2012.

The index deals with actual prices paid by wholesale buyers during the transaction. Source data is collected from different resource, including ministries and departments, as well as public and private companies. Different weights are given to the goods from the basket, reflecting the importance of products for the Indian economy. The composition of the basket is reviewed from time to time to reflect the actual structure of consumption.

The index is considered a leading indicator of consumer inflation, as changes in wholesale food prices lead to changes in retail prices received by end consumers. Also, various agencies may use the information on changes in wholesale prices for indexation and revision of payments. The rising index value indicates an increase in consumer spending, which may have a positive impact on INR exchange rates.