India is set to introduce a Producer Price Index (PPI) for the very first time. This move signals an effort to align with many advanced economies, providing officials with a more comprehensive view of inflation. The PPI will help highlight price changes across both goods and services in the country, which is known for being the fastest-growing large economy.
The Ministry of Commerce and Industry will reveal the new index on Tuesday. It will complement the existing Wholesale Price Index (WPI), which has been India’s traditional method of measuring inflation at the producer level. While the WPI focuses solely on wholesale prices of goods, the PPI will also include prices received by producers of services. This broader scope is particularly important as the service sector contributes about 55% to India’s total economic output.
