A sharp rise in wholesale inflation ~ to 9.68 per cent in May ~ is more than a statistical development; it is an early warning of stress building beneath the surface of the economy. When producers begin paying significantly more for energy, raw materials and intermediate goods, the effects rarely remain confined to factory floors. They eventually find their way into household budgets, corporate balance sheets and government policy calculations. India today faces precisely such a moment with wholesale inflation hovering close to 10 per cent. The immediate trigger may lie beyond its borders.

Geopolitical instability in West Asia has once again exposed the vulnerability of an economy heavily dependent on imported energy. Every spike in crude oil prices raises transportation costs, increases manufacturing expenses and widens the burden on businesses already navigating uncertain global demand. Yet it would be a mistake to view the present inflationary pressures as merely an oil story. What should concern policymakers is the broadening nature of price increases. When rising costs spread from fuel to manufactured goods and food items, inflation ceases to........

© The Statesman