PR No – 144
29th June
New Delhi
Industrial Production (Provisional) Expands by 5.1% in May 2026; Capital Goods and Manufacturing Signal Strengthening Investment Activity says PHDCCI
India’s industrial production recorded a year-on-year growth of 5.1% in May 2026, reflecting sustained momentum in the manufacturing sector and continued resilience in investment-led economic activity.
Manufacturing, which accounts for over three-fourths of the Index of Industrial Production (IIP), expanded by 5.5%, while Electricity & Gas Supply registered a robust 9.9% growth. The overall IIP stood at 122.7 in May 2026 compared with 116.7 in May 2025.
“The Ministry of Statistics and Programme Implementation (MoSPI) has also introduced a significant methodological improvement by replacing the Wholesale Price Index (WPI) with the newly introduced Output Producer Price Index (Output PPI) as the deflator for value-based manufacturing items. The revised methodology, covering nearly 36% of the IIP basket, is expected to provide a more accurate measure of real industrial output and aligns India’s industrial statistics with international best practices”, said Mr. Rajeev Juneja, President, PHDCCI.
Within manufacturing, there was strong growth in the production of electrical equipment (20.8%), motor vehicles, trailers and semi-trailers (14.5%), and basic metals (4.6%), reflecting strong demand across infrastructure, manufacturing, and automotive value chains.
The use-based classification also indicates broad-based expansion. Capital Goods recorded the highest growth of 12.9%, followed by Consumer Durables (7.2%), Infrastructure/Construction Goods (5.9%), and Intermediate Goods (5.8%), suggesting continued investment activity alongside improving industrial demand.
The sustained growth in industrial production, particularly the strong performance of manufacturing and capital goods, reflects improving investment sentiment and strengthening industrial capacity, he added.
However, the decline in Mining & Quarrying (-1.6%), particularly fuel minerals, points to supply-side challenges that warrant continued policy attention.
The broad-based expansion across capital goods, infrastructure-related industries and consumer durables is encouraging for India’s medium-term growth prospects. Government’s continued focus on infrastructure development, manufacturing competitiveness, logistics efficiency and ease of doing business has helped sustain industrial momentum and strengthen India’s position in global value chains said Dr. Ranjeet Mehta, SG & CEO, PHDCCI.”