IIP growth quickens to five-month high of 5.1% on cross-sector improvements

Growth in industrial activity quickened to a five-month high of 5.1% in May 2026, buoyed by stronger performances by the manufacturing, electricity, capital goods, and consumer goods sectors, the latest government data shows.

While releasing the data, the Ministry of Statistics and Programme Implementation also said that it has further tweaked the new series of the Index of Industrial Production (IIP), which had first been released on June 1. The new series has an updated base year of 2022-23 and incorporates new data sources.  

It explained that it has decided to discontinue the use of the Wholesale Price Index in the measurement of some value-based outputs in the IIP and has instead adopted the Producer Price Index for the purpose. 

“Accordingly, the present release supersedes the earlier WPI based IIP 2022-23 series released on 1st June 2026,” the release said. “Users are advised to use the PPI-based IIP series presented in this release for all analytical, research, and policy purposes.”

According to Rahul Agrawal, principal economist at ICRA, this change has “led to material changes in growth across segments such as manufacturing and is also likely to lead to revisions in the GDP data”.

The manufacturing sector grew 5.5% in May 2026, down from 6.1% in April but faster than the 4.2% growth registered in May last year. 

“Manufacturing has grown by 5.5% which can be attributed to a revival in consumption — both [consumer] durables and non-durables have done well at 7.2% and 3.6% respectively,” Madan Sabnavis, chief economist at the Bank of Baroda said. “Within durables, the auto sector was once again the leader followed by computers and other electronic goods.”

The electricity and gas supply category saw growth quicken to a two-year high of 9.9% in May 2026, driven by a delayed monsoon and higher temperatures.    

The mining and quarrying sector contracted by 1.6% in May 2026, the fifth consecutive month of contraction.

Growth in the consumer durables sector quickened to a five-month high of 7.2%, while that of the consumer non-durables sector grew to 3.6%, also a five-month high.