Data Alert
India IIP rises 5.1% in May on higher electricity production
This story was originally published at 17:34 IST on 29 June 2026
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--India May IIP growth 5.1%
--India May IIP growth 5.1% vs 3.4% year ago
--Informist Poll estimated May IIP growth at 4.5%
--India Apr-May IIP growth 5.1% vs 4.1% year ago
--India May mining, quarrying sector output growth -1.6% vs 5.8% year ago
--India May manufacturing sector output growth 5.5% vs 4.2% year ago
--India May electricity, gas supply sector output growth 9.9% vs -5.1% yr ago
--India May water supply sector output growth 5.5% vs 8.5% year ago
--India May primary goods output growth 2.6% vs 0.7% year ago
--India May capital goods output growth 12.9% vs 9.5% year ago
--India May intermediate goods output growth 5.8% vs 4.8% year ago
--India May infrastructure goods output growth 5.9% vs 5.7% year ago
--India May consumer durables output growth 7.2% vs 1.9% year ago
--India May consumer non-durables output growth 3.6% vs 3.3% year ago
NEW DELHI – Growth in India's industrial output, as measured by the Index of Industrial Production, unexpectedly rose to 5.1% in May due to higher electricity and gas supply in the wake of higher temperatures during the summer months, data released Monday by the statistics ministry showed.
At 5.1%, the May IIP growth was higher than expected. Economists polled by Informist had estimated IIP growth to moderate to 4.5% in May from 4.9% in April.
Industrial output had risen 3.4% a year ago, based on the new series, which uses 2022-23 (Apr-Mar) as the base year, compared with FY12 in the old series. The new IIP series covers more industries, such as rare earth minerals, gas supply, and water supply and tracks more items.
Growth in the electricity and gas supply sector production rose to 9.9% in May from 4.6% in April and (-)5.1% a year ago. Electricity production rose 11.1% in May due to higher demand in the summer months, while gas supply fell 7.1% in May due to supply chain disruptions due to the war in West Asia, which began almost four months ago.
Growth in the manufacturing sector, which carries the highest weightage in the new IIP series, also supported IIP growth in May. The sector's output rose 5.5% in May, up from 4.2% a year ago but slower than 6.1% in April.
Growth in output in the water supply, sewerage, and waste management segment moderated to 5.5% in May from 6.6% in April. The sector is a new addition to the IIP series. Mining and quarrying sector output declined 1.6% in May, a narrower fall than 3.8% in April, dragging down headline industrial production growth.
Within the six use-based classifications, the capital goods sector led the rise in May. Capital goods output rose 12.9%, up from 12.0% in April. The consumer durables segment also saw strong growth in May, with production rising 7.2%, up from 5.6% in April. The output in the consumer non-durables segment rose 3.6% in May from 0.2% in April.
The output in the primary goods segment rose 2.6% in May. Activity in the primary goods segment, which has the highest weight among the use-based categories, had risen 0.8% in April and 0.7% a year ago.
Intermediate goods production grew 5.8% in May, higher from 4.8% a year ago but sharply slower than 10.3% a month ago. The output of infrastructure or construction goods rose 5.9% last month, steady from 6.0% growth in April.
Industrial growth in Apr-May, the first two months for 2026-27 (Apr-Mar), was at 5.1%, up from 4.1% in the same period of last year.
The statistics ministry Monday said it will now use the output producer price index, instead of the WPI, as the deflator for a large number of items in the IIP basket. "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," Rahul Agrawal, principal economist at ICRA, said in a note.
According to Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, "Looking at the big picture, India's two-speed industrial sector continues to converge, with investment-related sectors — capital and infrastructure goods — cooling, while consumer-facing industries are finding their feet, after losing some momentum from the pop catalysed by the GST (goods and services tax) cuts late last year."
"In the short run, though, y/y (year-on-year) growth still looks more likely to soften rather than strengthen, as momentum has faded significantly since the Iran war started," Chanco said in a note.
The following tables detail year-on-year changes in industrial output in May:
| May 2026 | April 2026 | May 2025 | |
| General | 5.1% | 4.9% | 3.4% |
| Mining and Quarrying | (-)1.6% | (-)3.8% | 5.8% |
| Manufacturing | 5.5% | 6.1% | 4.2% |
| Electricity and Gas Supply | 9.9% | 4.6% | (-)5.1% |
| Water Supply, Sewerage, and Waste Management | 5.5% | 6.6% | 8.5% |
| Primary goods | 2.6% | 0.8% | 0.7% |
| Capital goods | 12.9% | 12.0% | 9.5% |
| Intermediate goods | 5.8% | 10.3% | 4.8% |
| Infrastructure/construction goods | 5.9% | 6.0% | 5.7% |
| Consumer durables | 7.2% | 5.6% | 1.9% |
| Consumer non-durables | 3.6% | 0.2% | 3.3% |
Source: Ministry of Statistics and Programme Implementation
End
Reported by Shweta
Edited by Saji George Titus
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