A sharp rise in global commodity and energy prices triggered by the ongoing West Asia conflict and the closure of the Strait of Hormuz has significantly increased manufacturing input costs in India, according to a latest report by Crisil. The report warned that persistent pressure on industrial raw materials could soon translate into higher consumer inflation in the coming months.
Crisil’s “Quickonomics” report released on May 27 said its Wholesale Price Index (WPI)-based input-output ratio crossed the critical 1.0 mark in April 2026 for the first time in nearly four years. The ratio rose to 1.02 after remaining below 1.0 for 44 consecutive months, indicating that manufacturers’ input costs are now rising faster than output prices.
The report attributed the increase primarily to a 6.2 percent month-on-month rise in input prices, while output prices increased only 0.7 percent during the same period. Higher prices of crude petroleum, natural gas, mineral oils, steel, fertilisers, plastics, chemicals, synthetic rubber, and non-ferrous metals were among the major contributors to the cost escalation.
According to Crisil, the last such spike in the input-output ratio occurred in March 2022 following the Russia-Ukraine conflict, and the elevated ratio had persisted for five months then as well.
The report noted that although overall WPI inflation averaged only 0.7 percent in fiscal 2026, prices of key industrial inputs had already begun hardening. Copper prices increased by 8.7 percent and aluminium by 6.5 percent during the previous fiscal, both above their long-term averages.
Inflationary pressures intensified sharply in April 2026. Overall WPI inflation climbed to 8.3 percent from 3.9 percent in March, while non-food WPI surged to 10.9 percent from 4.7 percent. Prices of copper rose 17.3 percent, aluminium 20.6 percent, crude oil-related products 49.3 percent and gas-related products 19.1 percent during the month.
Crisil warned that even if the Strait of Hormuz reopens, input costs are expected to remain elevated for some time due to continuing global supply disruptions and sustained commodity price pressures. The report said manufacturers may increasingly pass on higher costs to consumers as domestic demand remains resilient.
As a result, consumer inflation, especially core Consumer Price Index (CPI) inflation, could witness upward pressure in the coming months, the report added.