India’s industrial output, as measured by the Index of Industrial Production (IIP), grew 5.1% year-on-year in May, led by a robust expansion in manufacturing and supported by strong growth in electricity and gas supply sector, according to provisional data released by the ministry of statistics and programme implementation (MoSPI) on Monday.
The IIP stood at 122.7 in May 2026, compared with 116.7 a year ago, reflecting an overall improvement in output levels. The May print was higher than the 3.4% growth recorded in May 2025 and also an improvement from the 4.9% expansion in April 2026, as per industrial output estimates, indicating a gradual strengthening in industrial activity.
is closely tracked as a high-frequency indicator of economic activity and provides an early signal on manufacturing momentum, investment demand and overall growth trends in the economy.
The release marks the second month this fiscal year of the new IIP series with 2022-23 as the base year, which replaced the 2011-12 series. The new series aims to better reflect the evolving structure of India’s industrial economy, emerging manufacturing segments, and new infrastructure-related activities.
MoSPI has shifted its methodology, adopting the output producer price index (PPI) as a deflator instead of the wholesale price index (WPI) for items measured in value terms. Consequently, the ministry has revised and re-released the entire 2022-23 base series using PPI, superseding the WPI-based data released on June 1.
Manufacturing, which accounts for the largest share (76.062%) in the IIP, grew 5.5% year-on-year in May, slowing from 6.1% in April and significantly higher than 4.2% in the same month a year ago, providing the main impetus to overall growth.
The expansion was relatively broad-based, with 16 of 23 industry groups within recording positive growth. Key contributors included basic metals (4.6%), motor vehicles, trailers and semi-trailers (14.5%), and electrical equipment (20.8%), supported by higher production of steel products, auto components, commercial vehicles and industrial machinery.
and quarrying output declined 1.6% year-on-year in May, moderating from a 3.8% decline in April, far lower than 5.8% growth in May 2025, indicating fall in extraction activity. Electricity generation and gas supply increased 9.9% during the month, improving from 4.6% growth in April and far better than negative 5.1% in the year-ago period, pointing to improvement in power demand. Water supply, sewerage and water management grew 5.5% in May.
Use-based classification data showed a mixed but largely positive trend, with capital goods output rising sharply by 12.9%, signalling improving investment activity, while infrastructure and construction goods grew 5.9%, intermediate goods expanded 5.8%, and consumer durables increased 7.2%.
In contrast, primary goods posted a modest 2.6% growth, and consumer non-durables grew 3.6%, reflecting some weakness in mass consumption demand. Overall, infrastructure goods, intermediate goods and capital goods emerged as the key drivers of industrial growth during the month.
The May data suggest a gradual but uneven recovery in industrial activity, with manufacturing and investment-linked sectors gaining traction even as consumption trends remain mixed.
“The year-on-year (YoY) growth in the IIP inched up to 5.1% in May 2026 from 4.9% in April 2026, on the back of a sharp acceleration in electricity generation growth, driven by elevated temperatures as well as a low base. This segment pushed up the headline IIP print by as much as 57 bps between these months, which was partly offset by weaker performance across other sectors,” said Rahul Agrawal, Principal Economist, ICRA Ltd.
“Manufacturing output growth slowed to 5.5% in May 2026 from 6.1% in April 2026, despite a favourable base, amidst a broad-based deceleration across 15 of the 23 sub-segments between these months. Mining output witnessed a contraction for the 5th consecutive month in May 2026, although the extent of the same narrowed vis-à-vis April 2026. The MoSPI has shifted to using the output PPI as the deflator for a large number of items in the IIP basket, from the WPI earlier. This has led to material changes in growth across segments such as manufacturing and is also likely to lead to revisions in the GDP data,” he added.
Madan Sabnavis, chief economist, Bank of Baroda, said, “IIP growth at 5.1% for May is quite impressive and does show that we are on the right path. This comes after 4.9% growth in April. There has been a change in methodology as PPI deflators have been used for 234 of the 463 items included in the index. The performance is encouraging as it appears we are on a higher growth path notwithstanding the global environment. This can be attributed to steady domestic demand conditions.”
The IIP shift to 2022-23 is the 10th revision of base year of All India IIP. The first IIP was prepared with 1937 as the base year and has since been revised to 1946, 1951, 1956, 1960, 1970, 1980-81, 1993-94, 2004-05 and 2011-12.
Latest revisions
The revised index expands coverage beyond the traditional sectors of mining, manufacturing and electricity to include gas supply, water supply, sewerage and waste management activities. The mining and quarrying component has also been broadened to include minor minerals and rare earth minerals. It has also been split into dedicated indices for fuel minerals, metallic minerals and non-metallic minerals.
The energy basket now includes separate tracking of renewable and non-renewable electricity generation, allowing policymakers to better monitor India’s evolving energy mix.
According to the MoSPI, the new series comprises 463 item groups (with 1,042 mapped products) compared with 407 in the previous series, including 120 newly added products such as , stents, aircraft and spacecraft parts, magnetic stripe cards, articles of non-woven textiles and vaccines. Meanwhile, 64 outdated products including kerosene, CFL lamps, printing machines, sewing machines and certain tyre tubes have been dropped from the basket.
However, the six use-based categories—primary goods, capital goods, intermediate goods, infrastructure/construction goods, consumer durable goods and consumer non-durable goods—remain the same as the 2011-12 series.
The data has also been made more representative by excluding permanently shut factories, and including operating units and inducting newly commissioned large factories.
The revised series uses 2022-23 gross value added and output data to derive weights, and adopts the latest National Industrial Classification (NIC) 2025 for dissemination. The ministry will also release sectoral linking factors to allow for comparison between the old and new series.
The transition from WPI to Output PPI assumes significance because a part of industrial production in the IIP is reported in value terms. Out of the 463 item groups included in the IIP basket, 234 item groups, accounting for 36.02 per cent of the total weight, are compiled using value-based production data.
Output PPI provides a more granular price structure than the WPI. For value based items, use of Output PPI will improve the estimation of real output, MOSPI said in a statement.