India’s industrial output growth slows to 6.7% in September; manufacturing expands 7.6%

India’s industrial production growth slowed to 6.7% year-on-year in September 2026 from 8% in August, despite strong performances by the manufacturing and electricity and gas supply sectors, according to government data released on Wednesday.

The Index of Industrial Production (IIP) recorded growth of 7.6% in manufacturing and 11.2% in electricity and gas supply during the month. The overall index stood at 124.3 in September, compared with 116.5 in the year-ago period. The moderation in industrial output growth comes after an 8% expansion in August, according to the quick estimate for that month.

Manufacturing, electrical equipment drive growth

Within manufacturing, 17 of the 23 industry groups at the two-digit level recorded positive growth in September compared with the same month last year.

Manufacture of electrical equipment was the strongest-performing industry group, growing 33.9%. This was followed by rubber and plastics products, which expanded 19.9%, and motor vehicles, trailers and semi-trailers, which grew 19%.

Growth in the motor vehicles segment was supported by auto components, spares and accessories, passenger cars, and commercial vehicles.

In electrical equipment, switching and circuit-protection apparatus, including switchgear and circuit breakers, uninterruptible power supply (UPS) systems and solid-state drives, and optical-fibre connectors contributed to growth. Within rubber and plastics products, acrylic and other plastic sheets, tyres for light motor vehicles, and V-belts and rubber conveyors were among the key contributors.

Electricity and gas supply expands 11.2%

The electricity and gas supply sector recorded growth of 11.2% in September, while manufacturing expanded 7.6%.

The mining and quarrying sector and the water supply, sewerage and waste management segment also formed part of the industrial production index. However, the government's September release lists their index levels at 90.4 and 146.4, respectively, without specifying their corresponding September growth rates in the summary data.

The September quick estimates have been compiled using data received from source agencies, which collect information from factories and establishments. The figures may be revised in subsequent releases in line with the IIP revision policy.

Capital goods, intermediate goods clock double-digit growth

Under the use-based classification, intermediate goods recorded the highest growth among the major categories, expanding 12.2% year-on-year in September. Capital goods output increased 10.4%, while infrastructure and construction goods grew 7.2%.

Primary goods recorded growth of 4% while consumer durables output rose 6%. Consumer non-durables registered a more modest expansion of 1.4%.

The indices for September stood at 153.4 for capital goods, 131.7 for intermediate goods, 133 for infrastructure and construction goods, 111.6 for primary goods, 133.1 for consumer durables, and 111.8 for consumer non-durables.

Intermediate goods, primary goods and capital goods were the three largest positive contributors to overall IIP growth under the use-based classification. The figures suggest that industrial activity continued to receive support from manufacturing-related investment and intermediate production, while consumer non-durables recorded comparatively slower growth.

August data revised

Alongside the September quick estimate, the government released the final revised indices for August based on updated information received from source agencies. The weighted response rate for the September quick estimate was 86.5% while the August final revision was compiled with a response rate of 92%.

Aditi Nayar, Chief Economist, ICRA, said that with IIP growth accelerating to a robust 7.3% in Q2FY27 from 6.2% in Q1FY27, complimenting the strength visible across high frequency indicators, we anticipate GDP growth to exceed 7.0%, in Q2FY27 while moderating somewhat compared to the stronger-than-expected 7.8% seen in Q1.

"While the growth in manufacturing output eased to 7.6% in September 2026 from 8.6% in August 2026, partly on account of an unfavourable base, it remained quite healthy. As many as eight of the 23 manufacturing sub-segments, with a weight of 22.2% in the IIP, recorded a double-digit expansion in September 2026.Mining output contracted by a steep 6.2% in September 2026, led by the non-metallic minerals segment; output has contracted in eight of the last nine months. Utilities output expanded by double-digits for the second consecutive month in September 2026, led by the electricity segment, as strong demand amid sub-par rains supported power generation," Nayar said.