The sharp increase in global commodity and energy prices, driven by the West Asia conflict, is now extending beyond crude oil and may soon push up the cost of everyday consumer goods in India, according to the latest Quickonomics report by Crisil.
The report cautioned that manufacturers are grappling with a sharp rise in input costs — including crude oil, gas, copper, aluminium, plastics and chemicals — even as consumer prices have yet to increase at the same rate.
Crisil noted that its Wholesale Price Index (WPI)-based input-output ratio rose above the 1.0 threshold in April 2026 for the first time in 44 months, indicating that input costs are now increasing faster than the prices companies receive for their products.
"The ratio stood at 1.02, driven by a 6.2 per cent on-month rise in input prices, while output prices increased a modest 0.7 per cent," the report said.
In simple terms, the report shows that companies are spending much more to produce goods, but have only passed on a small part of those higher costs to consumers so far.
The report linked the sudden rise in costs to the ongoing West Asia crisis and the closure of the Strait of Hormuz, saying the disruption has widened the inflation shock beyond oil markets into broader industrial supply chains.
"The closure of the Strait of Hormuz has only broadened the shock to other input categories even as manufacturers are already grappling with higher costs from critical inputs such as copper and aluminium," Crisil said in the report.
The report highlighted that the pressure is no longer limited to fuel alone. Prices of several key industrial inputs rose sharply in April, including crude oil-linked products, metals and gas-related inputs that are widely used across sectors such as automobiles, consumer appliances, electronics, construction, packaging, pharmaceuticals and textiles.
"Based on the clustered WPI categories, copper prices surged 17.3 per cent, aluminium 20.6 per cent, crude oil-related 49.3 per cent and gas-related 19.1 per cent in April," the report said.
The report noted that the rise in copper and aluminium prices is particularly significant because these metals form the backbone of manufacturing activity and are used extensively in electric vehicles, power infrastructure, electronics, consumer durables and renewable energy equipment.
While wholesale inflation is expected to reflect the pressure first, Crisil cautioned that the impact may gradually reach household budgets as companies begin passing on higher costs to consumers.
"With input costs expected to remain elevated this year, even after the Strait reopens, manufacturers will continue to face higher costs," the report said.
"In the domestic market, with demand holding up so far, there is room to pass on the costs to consumers and support margins," Crisil said.
The report added that inflation based on the Consumer Price Index (CPI), especially core inflation, which excludes food and fuel, could witness upward pressure in the coming months.
(With inputs from ANI)
