How do you calculate PPI in economics?

Producer Price Index (PPI) is calculated by dividing the current prices received by the sellers of a representative basket of goods by their prices in some base year multiplied by 100. You can read about the Index of Industrial Production [UPSC Economy Notes] in the given link.

It is a measure of average prices received by producers of domestically produced goods and services

Further readings:

1. Merger of NSSO and Central Statistical Office (CSO) to form National Statistical Office (NSO)
2. Core Sectors of the Indian Economy