IIP – Index of Industrial Production

IIP Data Overview – May 2026 

Key Observations

• Industrial production growth remained healthy at 5.1%: India’s Index of Industrial Production (IIP) expanded 5.1% year-on-year in May 2026, supported primarily by strong manufacturing activity and robust growth in electricity generation.
• Manufacturing remained the primary growth driver: The Manufacturing sector, which carries the largest weight in the IIP basket (76.06%), recorded 5.5% YoY growth, making it the biggest contributor to overall industrial production.
• Electricity & Gas Supply posted the fastest sectoral growth: Electricity & Gas Supply grew 9.9% YoY, the highest among the four major sectors, reflecting strong energy demand across the economy.
• Mining activity contracted: Mining & Quarrying declined 1.6% YoY, making it the only major sector to record negative growth during the month.
• Capital Goods led the use-based categories: Capital Goods registered 12.9% growth, the highest among all use-based classifications, indicating continued strength in investment and capacity expansion.
• Consumer demand remained positive: Consumer Durables increased 7.2%, while Consumer Non-Durables grew 3.6%, suggesting that consumer demand remained resilient despite moderating growth.
• Infrastructure-related production stayed strong: Infrastructure/Construction Goods expanded 5.9%, highlighting continued momentum in infrastructure development and public investment.
• Intermediate Goods signalled stable manufacturing activity: Intermediate Goods recorded 5.8% growth, indicating healthy demand for industrial inputs and ongoing manufacturing activity.
• Most manufacturing industries recorded positive growth: Out of 23 manufacturing industry groups, 16 recorded positive year-on-year growth, showing that industrial expansion was broad-based rather than concentrated in only a few industries.
• Motor Vehicles, Electrical Equipment & Basic Metals were the biggest contributors: Within manufacturing, the strongest contributors were: Manufacture of Motor Vehicles, Trailers & Semi-Trailers (14.5%), Manufacture of Electrical Equipment (20.8%), Manufacture of Basic Metals (4.6%). These industries played a significant role in supporting overall manufacturing growth.
• New Output PPI methodology now applies: This is the first revised IIP release using the Output Producer Price Index (Output PPI) as the deflator instead of the Wholesale Price Index (WPI). The revised methodology applies to 234 of the 463 item groups, covering 36.02% of the total IIP weight, and supersedes the earlier WPI-based series released on 1 June 2026.

ChartForest Insight

India’s industrial activity remained broad-based and resilient during May 2026, with manufacturing continuing to act as the primary engine of growth. Strong expansion in Capital Goods indicates sustained investment activity, while robust performance in Electricity & Gas Supply reflects healthy demand from industries and infrastructure projects. Although Mining & Quarrying remained under pressure, weakness was largely offset by broad-based gains across manufacturing industries, where 16 of the 23 industry groups expanded compared with a year earlier. Overall, the latest data suggests that industrial momentum remains intact, although future releases should be monitored to determine whether the current pace of growth can be sustained amid changing domestic and global economic conditions.