Producer Price Index

Published on 25 Aug 2025

• India is planning a Producers’ Price Index (PPI) to replace the Wholesale Price Index (WPI).

• PPI measures wholesale prices from the point of view of producers of goods and services by tracking prices at different stages of production. 

• It records fluctuation in the product prices at the producer level. 

• India currently uses the wholesale price index (WPI), adopted in the 1970s, to measure wholesale rates of 117 primary articles, 16 fuel and power items and 564 manufactured products.

• Most developed economies use PPI to track producers’ prices , in line with the UN’s global System of National Accounts (SNA).

• Unlike the WPI, the PPI doesn’t include indirect product taxes (GST or VAT ), margins of the wholesaler and logistics cost. 

• WPI causes double counting by including both raw material prices (eg: price of steel) and final product prices (eg: car price that also includes steel), leading to inflation being recorded multiple times.

• PPI captures prices at different stages of production, reflecting only the value added at each stage without double counting.

Keywords:

Producer Price Index PPI PPI V/S WPI Index Indian Economy and Production Wholesale Price Index WPI inflation inflation measurement