IIP May 2026: India's Industrial Output Grows 5.1%
In May 2026, India's industry output increased. During the month, the Index of Industrial Production (IIP) increased 5.1% year over year, mostly due to a robust manufacturing performance and a significant increase in energy generation. For exporters, this is a significant signal because lead times typically shorten and input availability improves when domestic sectors operate at higher capacity. This information is directly related to your strategy whether you are tracking demand in industries like automotive, electrical, or pharmaceuticals or procuring items locally.
Before examining the figures, it is crucial to note that MoSPI has changed the deflator for the new IIP series (Base Year 2022–2023) from the Wholesale Price Index (WPI) to the Output Producer Price Index (Output PPI). This impacts 234 of the basket's 463 item categories, or roughly 36% of the entire index weight. The earlier WPI-based series, which debuted on June 1st, 2026, has been replaced. This updated PPI-based series should be used for any future analyses and comparisons.
📊 May 2026 IIP — At a Glance
| Sector | Growth (May'26 vs May'25) |
| Overall IIP | +5.1% |
| Manufacturing | +5.5% |
| Electricity & Gas Supply | +9.9% |
| Water Supply, Sewerage & Waste Mgmt | +5.5% |
| Mining & Quarrying | −1.6% |
What the Numbers Are Actually Telling Us
In May 2026, the overall IIP index was 122.7, up from 116.7 in May 2025. The manufacturing index increased to 122.6 from 116.2. Gas and electricity supply increased from 117.9 to 129.6. These are not insignificant changes; the electrical sector's over 10% increase in just one month indicates both increased industrial demand and a robust drive for renewable energy. In particular, the production of renewable electricity increased by 18% in May 2026 compared to May 2025, indicating an increase in the availability of green energy capability.
On the other hand, Mining & Quarrying remained negative at −1.6%. Non-metallic minerals decreased by 6.1%, while fuel minerals decreased by 6.4%. A robust 18.3% increase was only seen in metallic minerals, including rare earth minerals. Mining drops don't immediately impact exporters who operate in agriculture or processed food, but those that export building materials, ceramics, or minerals should keep an eye on this data item.
Manufacturing: Who Pulled the Growth?
In May 2026, manufacturing saw positive growth in 16 of the 23 industry groupings at the NIC 2-digit level. That's a wide basis, not a situation where the burden is being borne by only one or two sectors. These were the top three contributors:
1. Motor Vehicles, Trailers & Semi-Trailers (NIC 29) — grew 14.5%. Passenger cars, auto components, and commercial vehicles all contributed. This is a positive sign for the auto ancillary export sector.
2. Electrical Equipment (NIC 27) — grew 20.8%. Switchgear, circuit breakers, transformers, and UPS/solid-state drives were major contributors. India's electrical equipment exports have been rising, and this domestic surge in production reinforces that trend.
3. Basic Metals (NIC 24) — grew 4.6%. HR coils, mild steel plates, bars and rods of alloy and stainless steel drove this segment.
Textiles (NIC 13) expanded by 12.7%, Fabricated Metal Products (NIC 25) by 15.5%, Computer & Electronic Products (NIC 26) by 11.4%, and Other Transport Equipment (NIC 30) by a robust 14.3%. At 5.4%, Pharma (NIC 21) remained stable.
On the negative side, Wearing Apparel (NIC 14) fell 8.8%, Printing & Media (NIC 18) dropped 10.3%, and Coke & Petroleum Products (NIC 19) declined 4.7%. These are areas where production constraints or demand softness are showing up.
Manufacturing Sector Performance — May 2026 vs May 2025
| NIC | Sector | May'25 Index | May'26 Index | Growth % |
| 27 | Electrical Equipment | 133.5 | 161.3 | +20.8% |
| 29 | Motor Vehicles, Trailers & Semi-Trailers | 115.3 | 132.0 | +14.5% |
| 25 | Fabricated Metal Products | 112.6 | 130.0 | +15.5% |
| 30 | Other Transport Equipment | 134.0 | 153.2 | +14.3% |
| 13 | Textiles | 120.9 | 136.2 | +12.7% |
| 21 | Pharmaceuticals | 122.8 | 129.4 | +5.4% |
| 14 | Wearing Apparel | 103.6 | 94.5 | −8.8% |
| 18 | Printing & Recorded Media | 106.3 | 95.3 | −10.3% |
Use-Based Classification — What's Growing and What's Not
You can see more clearly why production is progressing in this manner thanks to the use-based breakdown. The 12.9% growth in capital goods is noteworthy because it indicates that businesses are investing in machinery and equipment, which is a predictor of future production capacity. Intermediate Goods increased by 5.8% and Infrastructure/Construction Goods by 5.9%.
Consumer Non-Durables increased by 3.6%, while Consumer Durables increased by 7.2%. Only 2.6% growth was seen in primary goods. According to use-based classification, Intermediate Goods, Capital Goods, and Primary Goods were the top three contributors to overall IIP increase in May 2026, in that order.
✅ Capital Goods: +12.9% — Businesses investing in capacity
✅ Consumer Durables: +7.2% — Demand for higher-ticket items holding up
✅ Infrastructure / Construction Goods: +5.9%
✅ Intermediate Goods: +5.8%
✅ Consumer Non-Durables: +3.6%
⚠️ Primary Goods: +2.6% — Slowest growth category
For exporters, the Capital Goods jump is probably the most telling. A 12.9% rise means Indian manufacturers are expanding capacity — which can translate into better product availability and possibly more competitive pricing over the next 6–12 months
Annual Trend — Is the Momentum Consistent?
When comparing the new 2022–2023 dataset to the previous 2011–2012 series, the annual growth rates show a continuous trend. Under the new series, the global IIP increased by 4.3% in 2025–2026 (compared to 4.1% under the previous). Under the new, manufacturing grew by 4.8%, compared to 5.0% under the old. Thus, the series adjustment improves the measurement rather than significantly changing the growth story.
The Capital Goods category is noteworthy since it expanded 10.4% annually in 2025–2026 under the new series, which is a significant amount and far more than the 8.3% under the previous system. This disparity indicates that production investment is being more precisely captured by the new Output PPI deflator, particularly in industries where value-based reporting was common.
| Category | 2023-24 | 2024-25 | 2025-26 |
| Overall IIP | 6.8% | 5.7% | 4.3% |
| Mining & Quarrying | 2.2% | 2.8% | 3.7%* |
| Manufacturing | 7.1% | 6.0% | 4.8% |
| Electricity & Gas Supply | 7.4% | 5.2% | 0.8% |
| Capital Goods (Use-Based) | 10.1% | 7.9% | 10.4% |
| Infrastructure/Construction Goods | 10.4% | 6.8% | 8.8% |
*Mining Apr-May 2026-27 cumulative still in negative territory. Annual 2025-26 figure is from revised series.
What This Means If You Are an Exporter
The IIP data is not just a macro number — it has real, practical implications for exporters depending on what you trade. Here's how to read it for your business:
If you export engineering goods / auto parts: The 14.5% jump in motor vehicles and 20.8% in electrical equipment is a strong tailwind. Domestic OEM demand is rising, which means component suppliers are ramping up — your sourcing options may widen.
If you export textiles: Production grew 12.7% in May. But wearing apparel fell 8.8% — so woven fabric production is healthy, but finished garments are under pressure. Plan sourcing around this gap.
If you export pharma or chemicals: Pharma is steady at 5.4%. Chemicals (NIC 20) declined slightly at −1.3%. Stable but not exceptional growth in these segments.
If you deal in agri / food products: Food products (NIC 10) grew 4.0% — modest but positive. Consumer non-durables, where most FMCG and processed food sits, grew 3.6% annually.
Watch out for: Mining being in the red means raw material supply for certain mineral-linked industries may face constraints. Factor this into your lead time planning.
Conclusion
May 2026 IIP at 5.1% is a healthy reading — not a blowout, but a broad-based growth that's backed by strong manufacturing activity across multiple sectors. The switch to Output PPI as deflator is a technical but important upgrade that makes the IIP more reliable for analysis. The next IIP release for June 2026 is scheduled for Tuesday, 28th July 2026.
For exporters, this is a data point that confirms domestic capacity is building. In sectors like auto, electrical, and fabricated metals, the production surge is real and may translate into more competitive export pricing and better availability in the months ahead.
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💬 Join WhatsApp Group 🔍 Follow on QuoraDisclaimer: All information in this post is sourced from the official PIB press release dated 29 June 2026 (Release ID: 2278961), Ministry of Statistics & Programme Implementation, Government of India. Figures for May 2026 are Quick Estimates and subject to revision. This post is for informational and awareness purposes only.