Industrial output growth slows to a four-month low of 6.7% in September 2026
In one line: India's industrial output grew 6.7% in September 2026, the slowest in four months, with strong capital and intermediate goods but weak consumer non-durables and a mining contraction.
Published 29 October 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
India's Index of Industrial Production (IIP) grew 6.7% year-on-year in September 2026, according to the quick estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) on 28 October 2026. This was a four-month low. Growth for August was revised down to 7.8% from the earlier quick estimate of 8%. The index stood at 124.3 in September 2026 against 116.5 a year earlier, on the new series with base year 2022-23. For April to September 2026, cumulative growth was 6.8%, compared with 4.4% in the same period of 2025.
Manufacturing, which carries a weight of 76.06% in the new index, grew 7.6%, slower than 8.6% in August. Electricity and gas supply grew 11.2% and water supply, sewerage and waste management, a sector added in the new series, grew 5.8%. Mining and quarrying contracted 6.2%, after falling 4.6% in August; The Indian Express linked it to monsoon disruptions. Seventeen of 23 manufacturing groups grew, led by electrical equipment (33.9%), rubber and plastics products (19.9%) and motor vehicles, trailers and semi-trailers (19.0%), while pharmaceuticals fell 8.9% and wearing apparel 5.2%.
By use, intermediate goods grew 12.2% and capital goods 10.4%, infrastructure and construction goods 7.2%, consumer durables 6.0% and primary goods 4.0%. Consumer non-durables, everyday goods such as food products and toiletries, grew just 1.4%, though this was their first rise after two months of contraction. Strong capital and intermediate goods suggest that investment and supply chains are holding up. The weak non-durables figure is the pain point: it signals that mass consumption demand remains soft, and the paper noted that export-oriented sectors such as apparel, chemicals and pharmaceuticals slowed amid global market disruptions.
Prelims facts
- IIP growth was 6.7% in September 2026, a four-month low; August was revised to 7.8% from 8%.
- The IIP now uses base year 2022-23 and has four sectors, including a new water supply, sewerage and waste management sector.
- Manufacturing (weight 76.06%) grew 7.6%, electricity and gas 11.2%, while mining contracted 6.2%.
- Intermediate goods (12.2%) and capital goods (10.4%) led the use-based categories; consumer non-durables grew only 1.4%.
- April to September 2026 growth was 6.8%, against 4.4% a year earlier.
Quick recall
- IIP growth in September 2026?
- 6.7%, a four-month low (quick estimate).
- Revised IIP growth for August 2026?
- 7.8%, down from the 8% quick estimate.
- Base year of the current IIP series?
- 2022-23.
- Weight of manufacturing in the new IIP?
- 76.06%.
- Which sector was added to the IIP in the new series?
- Water supply, sewerage and waste management.
- Mining output growth in September 2026?
- Contracted 6.2%.
- Weakest use-based category in September 2026?
- Consumer non-durables, up 1.4%.
- Cumulative IIP growth, April to September 2026?
- 6.8%, against 4.4% a year earlier.
Prelims practice question
With reference to the Index of Industrial Production (IIP) in India, consider the following statements:
1. It is compiled and released by the Ministry of Statistics and Programme Implementation.
2. In the series with base year 2022-23, manufacturing has a weight of about three-fourths.
3. The IIP covers the services sector as well as industry.
Which of the statements given above are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Show answer
Answer: (a) 1 and 2 only. Statement 1 is correct: MoSPI releases the IIP. Statement 2 is correct: manufacturing's weight is 76.06% in the new series. Statement 3 is wrong: the IIP measures industrial output only (mining, manufacturing, electricity and gas, and water supply and waste management), not services.
Use this in UPSC Mains: previous-year questions
Recurring theme: Industrial growth, manufacturing and the structure of demand in India
- How to use this
Gives current data showing industrial growth is uneven: investment goods are strong while mass consumer goods and mining lag.
- IIP grew 6.7% in September 2026; April to September averaged 6.8% against 4.4% a year earlier.
- Capital goods grew 10.4% and intermediate goods 12.2%, but consumer non-durables only 1.4%.
- Mining contracted 6.2%; export-linked pharmaceuticals fell 8.9% and apparel 5.2%.
- How to use this
Shows manufacturing dominates industrial output but labour-intensive segments are weak, supporting arguments for MSME-focused policy.
- Manufacturing carries 76.06% of the IIP's weight and grew 7.6% in September 2026.
- Seventeen of 23 manufacturing groups grew, led by electrical equipment (33.9%) and motor vehicles (19.0%).
- Labour-intensive wearing apparel output fell 5.2%, a weak spot for jobs.
Mains practice question
Strong growth in capital and intermediate goods alongside weak consumer non-durables output points to an uneven industrial recovery. Analyse with reference to the IIP data for September 2026 and suggest measures to broaden it. (150 words)
Model answer
India's IIP grew 6.7% in September 2026, a four-month low, with April to September growth at 6.8% against 4.4% a year earlier.
Signs of strength
- Capital goods up 10.4%, intermediate goods 12.2%: investment and supply chains are robust.
- Manufacturing (weight 76.06%) grew 7.6%; electrical equipment rose 33.9% and motor vehicles 19.0%.
- Electricity and gas supply grew 11.2%.
Signs of unevenness
- Consumer non-durables grew only 1.4%, showing weak mass consumption.
- Mining contracted 6.2%, hit by monsoon disruptions.
- Export-linked pharmaceuticals (-8.9%) and apparel (-5.2%) fell.
Broadening the recovery
- Support rural incomes and real wages to lift everyday consumption.
- Help labour-intensive exporters diversify markets.
- Speed up mining approvals and monsoon-proof logistics.
- Use the new 2022-23 base series, with renewable power and waste management, to target policy better.
Conclusion
The investment cycle is carrying industry for now; durable, job-rich industrial growth needs mass consumption demand and labour-intensive exports to join it.
The basics
Why this matters
The Index of Industrial Production is India's main monthly gauge of factory, mine and power output. UPSC tests what it measures, who releases it, its weights and how it differs from GDP or the core sector index. The September 2026 numbers, released on 28 October, also make a good Mains example of uneven growth.
What the IIP measures
The IIP is a volume index: it tracks how much is produced, not its value. It is released by MoSPI with a short lag; since 2025 the quick estimate comes out on the 28th of each month. Each quick estimate is replaced by a final estimate the following month, which is why August's 8% became 7.8%.
- 1ManufacturingWeight 76.06%; grew 7.6% in September 2026
- 2Mining and quarryingContracted 6.2%
- 3Electricity and gas supplyGrew 11.2%
- 4Water supply, sewerage and waste managementNew sector; grew 5.8%
The new series
In 2026 MoSPI moved the IIP to base year 2022-23 from 2011-12. The new series adds a fourth sector, water supply, sewerage and waste management, and shows renewable electricity separately. A newer base year matters because the economy's structure changes: new products appear, old ones fade, and weights should reflect current output.
Two ways to read the index
The sectoral view tells you where output comes from. The Use-based classification tells you what the output is used for, and so says more about demand.
What the pattern means
Capital goods are machines and equipment, so their growth points to investment. Intermediate goods are inputs such as steel or chemicals, so they reflect supply chains. Consumer non-durables are daily-use goods bought by most households; their weak growth suggests mass demand is soft. The Base effect also matters: a high or low figure a year earlier can flatter or depress this year's growth rate.
Related indicators
The Index of Eight Core Industries covers a narrower set of infrastructure industries and comes out earlier, so it is often read as a preview of the IIP. Together with MoSPI data on GDP, these indicators form the high-frequency picture of the industrial economy.
Go deeper
Why it matters for UPSC
The IIP is a staple of Prelims economy questions (what it measures, weights, base year) and a ready data source for Mains answers on industrial growth, manufacturing and demand. The 2022-23 base revision is new and examinable.
The core idea
The IIP is compiled by MoSPI and measures the volume of industrial output. Read through the Use-based classification, the September data show an investment-led pattern: machines and inputs are growing fast, everyday consumer goods are not. Month-to-month swings must be read with the Base effect in mind. The Index of Eight Core Industries is a narrower, earlier indicator that overlaps with the IIP.
Numbers and dates to remember
- 6.7%: IIP growth, September 2026 (released 28 October 2026)
- 7.8%: revised August 2026 growth (from 8%)
- 76.06%: manufacturing's weight; 7.6% growth
- -6.2%: mining; 11.2%: electricity and gas
- 12.2% intermediate, 10.4% capital, 1.4% consumer non-durables
- 6.8%: April to September 2026, against 4.4% a year earlier
Where to go next
- MoSPI: who produces the numbers
- Use-based classification: reading the IIP by end use
- Base effect: why growth rates can mislead
- Index of Eight Core Industries: the IIP's early cousin
Go deeper: Is India's industrial growth broad-based?
The optimistic reading. Capital goods (10.4%) and intermediate goods (12.2%) growth suggest firms are investing and supply chains are busy. Manufacturing grew 7.6%, and the first half of 2026-27 averaged 6.8%, well above 4.4% a year earlier. Electrical equipment and motor vehicles grew fast.
The cautious reading. Consumer non-durables grew only 1.4%, and that was the first rise after two months of contraction. These goods are bought by most households, so their weakness points to soft mass demand. Labour-intensive and export-linked segments such as apparel and pharmaceuticals fell. Mining has been contracting, partly because of the monsoon.
How to use the Use-based classification. Growth driven by investment goods can sustain itself only if consumption follows; otherwise capacity built today stays idle. That is the classic argument that India needs both public capital spending and support for household incomes.
Measurement caveats. Quick estimates are revised; August fell from 8% to 7.8%. The Base effect can flatter growth after a weak month a year earlier. The new 2022-23 base from MoSPI changes weights and adds sectors, so comparisons with the old 2011-12 series need care. The Index of Eight Core Industries gives an earlier but narrower signal.
MoSPI
The ministry that produces the IIP and other key statistics
In one line: The Ministry of Statistics and Programme Implementation (MoSPI) is the Union ministry responsible for India's official statistics, including GDP, inflation (CPI) and the IIP.
What it does
MoSPI's statistics wing, the National Statistics Office, compiles national accounts, consumer price indices, the Periodic Labour Force Survey and the IIP. Its releases follow a published calendar so that markets and policymakers know when data will arrive.
Why it is in the news
MoSPI released the September 2026 IIP quick estimates on 28 October 2026. In 2026 it also moved the IIP to a new base year, 2022-23, adding a water supply and waste management sector and showing renewable electricity separately. Base-year revisions are part of a wider update of India's macro data.
Where to go next
Use-based classification
Reading industrial output by what it is used for
In one line: The use-based classification groups IIP output by end use: primary, capital, intermediate, infrastructure and construction, consumer durable and consumer non-durable goods.
Why it is useful
The sectoral view (mining, manufacturing, electricity) shows where output comes from. The use-based view shows what demand it serves. Capital goods track investment; intermediate goods track supply chains; consumer durables (cars, appliances) track better-off households' spending; consumer non-durables (food products, toiletries) track mass consumption.
September 2026
Intermediate goods grew 12.2%, capital goods 10.4%, infrastructure and construction goods 7.2%, consumer durables 6.0%, primary goods 4.0% and consumer non-durables only 1.4%. The gap between the top and bottom categories is the main story of the month.
Where to go next
Base effect
Why a growth rate can look high or low for the wrong reason
In one line: The base effect is the influence of the comparison period's level on a growth rate: a weak base inflates growth, a strong base depresses it.
How it works
Year-on-year growth compares this month's index with the same month last year. If output was unusually low last year, even normal output today shows high growth, and the reverse is also true. Analysts therefore look at index levels and multi-month averages, not just one month's rate.
Why it matters for the IIP
The September 2026 index was 124.3 against 116.5 a year earlier. The April to September average of 6.8% is a steadier guide than any single month. The term also differs from a base-year revision, which changes the reference year of the whole index, as with the move to 2022-23.
Where to go next
Index of Eight Core Industries
The narrower indicator released before the IIP
In one line: The Index of Eight Core Industries tracks output of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.
How it relates to the IIP
These eight industries are basic inputs for the rest of the economy, and they make up a large share of the IIP's weight. Because the core index is published earlier in the month by the Ministry of Commerce and Industry's Office of the Economic Adviser, it is read as an early signal of where the IIP will go.
Why it is relevant
Core sector and IIP readings together help separate infrastructure-led growth from broader manufacturing and consumer demand. A strong core index with weak consumer non-durables suggests investment rather than mass consumption is driving industry.
Where to go next
Take the 29 October 2026 quiz: 30 Prelims-style questions with answers