India's Industrial Output Surges: May 2026 Highlights Growth and Methodological Shift

India's IIP registered a 5.1% growth in May 2026, fueled by manufacturing and electricity sector gains. The Ministry of Statistics introduced a new IIP series using the Output PPI, enhancing the reliability of real output estimates. Capital goods led the growth among use-based categories.

India's industrial production witnessed a significant upturn, expanding by 5.1% in May 2026 compared to the previous year. The latest data from the Ministry of Statistics and Programme Implementation (MoSPI) underscored robust contributions from both manufacturing and electricity sectors, though mining and quarrying faced a decline.

In a substantial methodological overhaul, MoSPI has replaced the Wholesale Price Index (WPI) with the Output Producer Price Index (Output PPI) as the deflator for the new IIP series, beginning with the base year 2022-23. This change impacts 234 out of 463 item groups, refining the precision in capturing price fluctuations and aligning with global standards.

The report highlights that within manufacturing, the automotive and electrical equipment sectors were major growth drivers. Moreover, the revised data reveal that capital goods led among use-based classifications, registering a remarkable 12.9% expansion, signaling an optimistic industrial trajectory.