New Delhi: India’s wholesale price inflation rose for the fifth consecutive month to 3.88 percent in March 2026, driven largely by a sharp spike in fuel, power, and manufactured product prices amid the ongoing West Asia crisis, according to government data released on Wednesday.
Fuel, Crude Prices Drive Spike
A key contributor to the rise was the fuel and power segment, where inflation climbed to 1.05 percent in March, reversing a deflation of 3.78 percent recorded in February. Crude petroleum prices saw an exceptional surge, with inflation jumping to 51.57 percent compared to a deflation of 1.29 percent a month earlier.
This spike aligns with global crude oil trends, where prices have risen sharply following geopolitical tensions in West Asia. Since late February, crude prices have surged significantly due to supply disruptions linked to the ongoing conflict.
Manufacturing Inflation Edges Higher
Inflation in manufactured products also increased to 3.39 percent in March, up from 2.92 percent in February. The rise was attributed to higher costs in basic metals, non-food articles, and other manufacturing segments, reflecting broader input cost pressures across industries.
The industry ministry noted that the overall positive inflation rate was primarily due to rising prices of crude petroleum, natural gas, and manufactured goods.
Food Inflation Shows Moderation
In contrast, food inflation showed signs of easing. The rate of increase in food article prices slowed to 1.90 percent in March, compared to 2.19 percent in February. Vegetable inflation also moderated sharply to 1.45 percent, down from 4.73 percent in the previous month, offering some relief on the food front.
Government Steps To Contain Impact
To cushion consumers from rising fuel costs, the government reduced excise duty by Rs 10 per litre on petrol and diesel on March 26. This move aimed to prevent oil marketing companies from passing on the full impact of soaring global crude prices.
International crude prices surged from around USD 70 per barrel to nearly USD 122 within a month, marking a steep rise driven by geopolitical disruptions.
RBI Holds Rates Amid Inflation Watch
Retail inflation, measured by the Consumer Price Index (CPI), rose to 3.4 percent in March from 3.21 percent in February. Despite the uptick, the Reserve Bank of India kept benchmark interest rates unchanged in its latest policy review, as it continues to monitor inflation trends closely.
