India’s industrial output growth accelerates to 8% in August; manufacturing rises 9%

India’s industrial output growth accelerated to 8% year-on-year in August 2026 from 6.7% in July, marking a further improvement in factory activity, according to the latest Index of Industrial Production (IIP) data released by the Ministry of Statistics and Programme Implementation (MoSPI). The expansion was led by manufacturing and electricity, while mining remained in contraction. The IIP index stood at 123.3 in August, compared with 114.2 in the same month last year.

Manufacturing, which accounts for more than three-fourths of the IIP, grew 9% in August, compared with 3.6% a year earlier. Electricity and gas supply increased 12.3%, while water supply, sewerage and waste management rose 6.3%. Mining and quarrying, however, contracted 5.6% during the month. Within mining, fuel minerals declined 5.7% and non-metallic minerals fell 12.8%, while metallic minerals grew 5%.

18 of 23 manufacturing groups record growth

The manufacturing recovery remained broad-based, with 18 of the 23 industry groups registering year-on-year growth in August. Electrical equipment recorded the strongest expansion at 30.9%, followed by other transport equipment at 25.3% and motor vehicles, trailers and semi-trailers at 25.2%.

Rubber and plastic products output increased 21.4%, while computer, electronic and optical products rose 19.3%. Fabricated metal products recorded 16.9% growth. However, wearing apparel output declined 7.4%, tobacco products fell 8%, coke and refined petroleum products declined 0.6% and chemicals contracted 0.5%.

Capital goods, consumer durables post double-digit growth

Capital goods output rose 16.9% in August, following 19% growth in July, while intermediate goods increased 13.7%. Consumer durables grew 11.1%, while infrastructure and construction goods rose 6.4%. Primary goods increased 3.5%.

Consumer non-durables, however, remained a laggard, growing just 2.1%. Higher prices and low purchasing power have affected demand and, consequently, production in this segment.

Analysts see recovery gaining pace

Commenting on the industrial output numbers, Madan Sabnavis, Chief Economist, said the revival in industrial growth is a positive sign and has been visible over the last few months. He said growth in credit to industry has also been very high and broad-based, supporting the view that the sector is recovering rapidly this year and could contribute positively to overall economic growth.

Commenting on the industrial output numbers, Madan Sabnavis, Chief Economist, said the revival in industrial growth is a positive sign and has been visible over the last few months. He said growth in credit to industry has also been very high and broad-based, supporting the view that the sector is recovering rapidly this year and could contribute positively to overall economic growth.

Dr. Devendra Pant, Chief Economist, India Ratings and Research (Ind-Ra), said the August acceleration was driven by strong electricity and manufacturing growth, with manufacturing improvement becoming more broad-based. He noted that continued growth in capital goods, infrastructure/construction goods and intermediate goods points to increased investment activity, although gas-based electricity generation remains affected by the West Asia crisis. Ind-Ra expects IIP growth to moderate to around 6% in September due to the base effect, particularly in manufacturing, which accounts for about 76% of the index.

Rajeev Juneja, President, PHDCCI, said the 8% IIP growth, supported by 9% manufacturing and 12.3% electricity and gas supply growth, along with double-digit expansion in capital goods, intermediate goods and consumer durables, points to sustained industrial momentum. Ranjeet Mehta, SG & CEO, PHDCCI, said the broad-based expansion is a positive indicator of resilience and called for continued structural reforms, greater private investment and deeper integration into global value chains.