India’s industrial output rose 8%: where the growth is concentrated
Manufacturing and capital goods grew faster in August, while mining contracted and consumer non-durables lagged.
India’s industrial output grew 8.0% in August 2026 compared with August 2025, according to the statistics ministry’s 28 September release. Manufacturing rose 9.0%, with vehicles and electrical equipment among the leading contributors, while mining and quarrying fell 5.6%. Firms supplying those industries therefore face very different production trends beneath the same national headline.
How broad is the improvement? Most manufacturing groups grew, but the strongest expansion was in equipment, components and durable goods. Everyday consumer goods grew much more slowly. Understanding that mix is more useful than treating 8% as the growth rate of every factory—or every worker’s prospects.
What the 8% actually measures
The Index of Industrial Production, or IIP, combines production reported by factories and other establishments into a measure of industrial output. It covers manufacturing, mining and quarrying, electricity and gas supply, and water, sewerage and waste management. It measures how much these activities produce; it does not measure their sales revenue.
An index makes different kinds of output comparable by expressing them relative to a reference period. In the current series, the base year is 2022–23, set to 100. August’s overall index was 123.3, compared with 114.2 a year earlier. Dividing 123.3 by 114.2 and subtracting one gives about 8% growth.
The sectors have different weights in that combined measure. Manufacturing carries about 76% of the index weight, so its 9% rise has much more influence on the headline than an equally large change in a small sector. That weight describes the index’s construction, rather than manufacturing’s share of jobs or GDP.
| Sector | Output growth |
|---|---|
| Manufacturing | 9.0% |
| Mining and quarrying | −5.6% |
| Electricity and gas supply | 12.3% |
| Water, sewerage and waste management | 6.3% |
August 2026 compared with August 2025; quick estimates. Source: MoSPI, Statement I of the release.
Which factories were driving the increase?
Eighteen of the 23 manufacturing industry groups recorded growth. The ministry identifies motor vehicles, trailers and semi-trailers; electrical equipment; and other transport equipment as the three largest positive contributors to August’s industrial growth.
Their own output grew 25.2%, 30.9% and 25.3%, respectively. Those percentages describe growth within each industry, rather than the number of percentage points it added to the overall 8%.
The products behind those labels are concrete: cars, commercial vehicles and auto components; switchgear and circuit breakers; motorcycles, scooters and railway rolling stock. The release names these among the products contributing to growth. The headline therefore contains a strong equipment-and-transport story.
Other factories had a weaker month. Food products grew 2.8%, while wearing apparel fell 7.4%. Chemicals and refined petroleum products also contracted. A supplier’s relevant comparison is the industry it serves, because the national average combines these diverging outcomes. The release provides industry totals, without identifying any individual firm’s orders or profitability.
Equipment grew faster than everyday consumer goods
A second classification groups output by what goods are used for. Capital goods are equipment used to produce other goods. Intermediate goods are inputs used in further production. Consumer durables are purchases intended to last, while consumer non-durables are used up or replaced more frequently.
| Goods by use | Output growth |
|---|---|
| Capital goods | 16.9% |
| Intermediate goods | 13.7% |
| Consumer durables | 11.1% |
| Infrastructure and construction goods | 6.4% |
| Primary goods | 3.5% |
| Consumer non-durables | 2.1% |
August 2026 compared with August 2025; quick estimates. Source: MoSPI, Statement III of the release. These categories regroup industrial output and should not be added to the sector table.
This view shows faster production of equipment, inputs and longer-lasting consumer goods than of frequently replaced goods. Producing more machinery can support investment, but the IIP does not tell us whether that machinery has been bought and installed. Similarly, consumer-goods output and household purchases can differ as goods move through inventories and distribution. The numbers describe production, not a direct reading of household spending.
The comparison to carry forward
August is a quick estimate and will be revised as more production data arrive. July illustrates why that matters: its growth rate was initially reported as 6.7%, but the latest release’s final table puts it at 7.4%. August’s 8.0% is therefore 0.6 percentage points above the current July figure.
For workers, the report is a picture of industrial activity around them; employment and wages require separate evidence. For suppliers, the industry and goods breakdowns help locate the expansion before examining their own customers and orders.
The next IIP release, scheduled for 28 October, will report September and update August. The useful question is whether equipment and transport remain strong, and whether slower consumer-goods industries join the expansion. August shows growth across much of manufacturing, with substantial differences in its pace.
Image: Uni Klinger manufacturing plant, photographed in December 2022 by UKL INDIA. Archive photograph; cropped. Photo and these adaptations are licensed CC BY-SA 4.0.
