Industrial output, measured by the Index of Industrial Production (IIP), grew by 5.1% year-on-year in May 2026 on the back of strong growth in manufacturing and electricity, shows the recent data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday.
As per the official data, manufacturing, which has the highest weight in the index, grew by 5.5% in May, while electricity and gas supply registered a robust 9.9% growth. Mining and quarrying, however, contracted 1.6%. The overall IIP stood at 122.7 in May 2026, up from 116.7 in the corresponding month last year. Manufacturers of motor vehicles, trailers and semi-trailers, manufacture of electrical equipment and manufacturer of basic metals witnessed the highest growth of 14.5%, 20.8% and 4.6% respectively.
“On the used based side, the uptick in consumer goods production – both durable and non-durable goods - is a positive signal. However, its durability of recovery in the consumption needs monitoring amid ongoing geopolitical volatility, inflationary pressures, and slow progress of the monsoon,” said Rajani Sinha, Chief Economist, CareEdge Ratings.
The government has unveiled a key methodological change to improve the measurement of industrial activity. This time onwards , MoSPI released the new series of the All India Index of Industrial Production (IIP) with base year 2022–23 on 1st June 2026, using the Wholesale Price Index (WPI) as the deflator.
Economists cautioned that a weaker monsoon could pose a threat to the consumption and inflation outlook and overall, India’s industrial activity will need to navigate an increasingly uncertain external environment alongside emerging domestic challenges.
IIP grew 4.9% in the preceding month. Sixteen of the 23 manufacturing sub-sectors recorded output growth in April, with notable gains in textiles, paper products, fabricated metals, electrical equipment, machinery, and automobiles.