India’s industrial production recorded a year-on-year growth of 5.1 per cent in May 2026, supported by robust performance in the manufacturing and electricity sectors, according to the latest Index of Industrial Production (IIP) released by the Ministry of Statistics and Programme Implementation (MoSPI).
Along with the latest industrial output data, the ministry has introduced a major methodological change by adopting the Output Producer Price Index (Output PPI) in place of the Wholesale Price Index (WPI) as the deflator for value-based items in the IIP. The revised IIP series, with 2022-23 as the base year, supersedes the earlier WPI-based series released on June 1, 2026.
The ministry said the transition to Output PPI is significant as 234 of the 463 item groups in the IIP basket, accounting for 36.02 per cent of the total index weight, are compiled using production data reported in value terms. According to MoSPI, Output PPI provides a more granular measure of producer prices, improving the estimation of real industrial output. The move also aligns India’s industrial statistics with international best practices and recommendations of the Technical Advisory Committee on the IIP base revision.
The Quick Estimate of the IIP stood at 122.7 in May 2026 compared to 116.7 in May 2025. Among the major sectors, manufacturing registered a growth of 5.5 per cent, Electricity and Gas Supply recorded the highest growth at 9.9 per cent, while Water Supply, Sewerage and Waste Management expanded by 5.5 per cent. Mining and Quarrying, however, contracted by 1.6 per cent during the month.
Manufacturing continued to be the key driver of industrial activity, with 16 out of 23 industry groups recording positive growth over the previous year. The highest growth was recorded in the manufacture of electrical equipment at 20.8 per cent, followed by motor vehicles, trailers and semi-trailers at 14.5 per cent, and basic metals at 4.6 per cent. Higher production of passenger cars, commercial vehicles, auto components, electrical switchgear, transformers and steel products contributed significantly to the sector’s performance.
According to the use-based classification, Capital Goods recorded the strongest growth at 12.9 per cent, indicating continued investment activity. Consumer Durables grew by 7.2 per cent, Infrastructure and Construction Goods by 5.9 per cent, Intermediate Goods by 5.8 per cent, Consumer Non-Durables by 3.6 per cent, and Primary Goods by 2.6 per cent. Intermediate Goods, Capital Goods and Primary Goods emerged as the largest contributors to overall industrial growth during the month.
Besides replacing WPI with Output PPI, MoSPI has incorporated updated production data received from source agencies since April 2022 and revised the Electricity Index to address issues related to sub-sectoral weights. The ministry said the revised Output PPI-based IIP series should now be used for analytical, research and policy purposes. The next Index of Industrial Production for June 2026 will be released on July 28, 2026.
