Clues India’s 3 inflation indices offer on consumption, profits, dependence on China

Prelims-testable facts

• 01India has three inflation indices: Consumer Price Index (CPI), Wholesale Price Index (WPI), and Producer Price Index (PPI).
• 02The CPI measures the prices paid by consumers, WPI tracks prices of goods at wholesale level, and PPI measures prices of goods at producer level.
• 03In June 2026, India's CPI inflation rate was 4.38%, crossing the RBI's target of 4% for the first time in 17 months.
• 04Core inflation (excluding food and fuel) remained flat at 3.9% in June 2026, indicating subdued consumption despite high GDP growth.
• 05The three inflation indices provide a more complete picture of India's economy by measuring inflation from different perspectives.
• 06Rising food prices, volatile global commodity markets, and higher input costs are pushing all three inflation measures higher.

Trap alerts

• Most people think CPI is the only measure of inflation in India, but actually there are three indices: CPI, WPI, and PPI.
• Most people think RBI's target for CPI inflation is always 4%, but it can change based on economic conditions.