India’s industrial output accelerated to 5.1 per cent year-over-year in May 2026, up from 4.9 per cent in April, driven by robust electricity demand, resilient manufacturing activity and strong growth in capital goods, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).
The latest figures mark the second monthly release under the revised Index of Industrial Production (IIP) series, which now uses 2022–23 as the base year. The Quick Estimate of the IIP stood at 122.7 in May, compared with 116.7 in the same month last year.
Manufacturing, which accounts for the largest share of industrial output, expanded 5.5 per cent, while electricity and gas supply surged 9.9 per cent, boosted by increased power demand during widespread heatwaves. Water supply, sewerage and waste management also recorded growth of 5.5 per cent.
Mining and quarrying remained the weakest segment, contracting 1.6 per cent for the fifth consecutive month, although the pace of decline moderated.
Within manufacturing, 16 of the 23 industry groups posted positive growth. Motor vehicles, trailers and semi-trailers led the expansion with growth of 14.5 per cent, followed by electrical equipment at 20.8 per cent and basic metals at 4.6 per cent. Strong demand for passenger vehicles, commercial vehicles, auto components, transformers, switchgear and steel products supported the gains.
The use-based classification showed broad-based industrial momentum. Capital goods recorded the fastest growth at 12.9 per cent, signalling continued investment activity. Infrastructure and construction goods rose 5.9 per cent, intermediate goods increased 5.8 per cent, consumer durables grew 7.2 per cent and consumer non-durables advanced 3.6 per cent. Primary goods posted a more modest increase of 2.6 per cent.
Economists attributed much of the improvement to strong electricity generation during extreme summer temperatures. However, they cautioned that manufacturing growth softened from April’s 6.1 per cent pace, reflecting higher input costs and supply chain disruptions linked to tensions in West Asia.
Analysts also warned that industrial growth could moderate in the coming months due to elevated costs for imported raw materials, continued geopolitical risks affecting global energy markets and concerns over a weaker-than-normal monsoon. As of June 29, all-India rainfall was reported to be 42 per cent below normal, raising the possibility of softer rural demand later in the fiscal year.
Industry groups welcomed the latest data, saying the strong performance of manufacturing, capital goods and investment-driven sectors reflects continued resilience in India’s industrial economy. They emphasized that sustained policy support, stronger private investment and measures to address weakness in the mining sector will be critical to maintaining broad-based industrial growth through the remainder of FY2026-27.
