3 October 2026·7 min read

How to check whether a price increase is real

procurementsourcingpricingMSME

A price increase letter arrives. It cites unprecedented input cost pressure, regrets the necessity, and asks for 14%.

You have no idea whether that is true.

That is the whole problem. Your supplier knows exactly what their steel cost last year and what it costs now. You know what they are charging you. The conversation that follows is not a negotiation about facts — it is a contest of nerve, and the person with better information usually wins it.

Except the information is public. India publishes it every month.

What the government actually publishes

The Office of the Economic Adviser, in the Ministry of Commerce and Industry, compiles the Wholesale Price Index. Most people have met it as a single inflation number on the news. That is not what it is.

The WPI is published commodity by commodity. The current series, base year 2022-23, covers 697 items — and at the leaf level there are 957 individual price series. Not "metals". Not "manufactured products". Actual lines like:

Hot Rolled Steel Coils/Sheets/Strips
Bars and Rods of Mild steel
Cotton Yarn
Corrugated Boxes
Pig iron

Each one has its own monthly index value going back years. If your supplier says steel went up, there is a published number for exactly how much steel went up, in the months they are talking about.

It is also the right index for this. The Consumer Price Index measures what households pay at the retail counter. The WPI measures prices at the wholesale and producer stage — the same kind of transaction your supplier is actually making.

The arithmetic is deliberately simple

You want to be able to repeat this in front of the supplier, so it has to be something you can do on paper:

justified price = old price × (index now ÷ index then)

That is it. You let their old price stand — you are not reopening whether it was right in the first place, because you have no basis to and they will say so. You test only whether the movement matches the published series.

A worked example using real figures. A buyer paying ₹42 a unit is asked for ₹48, an increase of 14.3%, on a steel item. The WPI for Hot Rolled Steel Coils was 83.2 in August 2025 and 87.9 in August 2026 — a rise of 5.6%.


Old price	₹42.00
Price asked	₹48.00
Increase sought	+14.3%
Official index, same months	+5.6%
Price that would track the index	₹44.37
Difference	₹3.63 a unit

On 22,200 units a year that gap is ₹80,528. Not a rounding error, and not something you would have found by arguing.

You can run your own numbers with our free supplier price increase check — pick your commodity from the official list, enter the two prices and the months, and it does the comparison and prints a review note you can send.

A gap is a question, not a verdict

This is the part to get right, because the tool is useless if you misuse it.

An index tracks a basket for a whole commodity. Your supplier buys a particular grade, from particular mills, on particular terms, and their energy, labour and freight costs move on their own schedule. A gap against the index does not prove you are being overcharged.

What it does is change the question. Instead of:

"That seems like a lot."

you can say:

"The WPI for this commodity moved 5.6% over these months. You are asking for 14.3%. Which cost head accounts for the rest, and over what period did it move?"

An honest supplier answers that in a sentence — freight, a power tariff revision, a grade change, a minimum wage notification. An opportunistic increase tends to go quiet, or comes back with a smaller number. Either outcome is useful, and neither required you to be aggressive.

Sometimes it clears your supplier, and that matters more

Run this often enough and you will find suppliers who raised prices less than their input index did. That means they absorbed part of the rise instead of passing it to you.

Most buyers never notice this, because nobody checks when the news is good. It is worth noticing. A supplier carrying cost on your behalf is the one to protect when you consolidate your vendor list, and the one to tell — very few of their customers ever will.

A tool that could only ever find overcharging would not be a benchmark. It would be an argument with a calculator attached.

Fix the clause, not just the number

If revised prices keep arriving unannounced, the number is a symptom. The underlying problem is that your agreement never said how prices change.

Ask for a price review clause: a named index, a stated review period, and movement in either direction. Suppliers accept this far more readily than buyers expect, for a reason worth understanding — it protects them too. When their input costs genuinely spike, they get a contractual basis for an increase instead of having to write a letter and hope. What it removes is the discretionary increase that arrives because a quarter looked thin.

It also ends the annual argument, which is worth something to both of you.

What this does not do

It does not tell you whether the price is right — only whether the increase is consistent with published costs. A supplier who was overcharging you from day one and then raises prices exactly in line with the index will pass this test cleanly.

For that you need a second quote, which is a different exercise entirely. Checking the movement is how you handle the supplier you have. Finding out what someone else would charge is how you find out whether you should have them at all.

We source and vet suppliers and send you a clean comparison — and because we never take a cut of the price, we have no reason to steer you toward the expensive one. That neutrality is the whole point: nobody who makes money on the spread can tell you what something should cost.