India's industrial output rises 5.1% in May; capital goods lead growth

India's industrial output grew 5.1% year-on-year in May due to stronger manufacturing and electricity generation, according to official data released on Monday.

The Index of Industrial Production (IIP) had grown 4.5% in April 2026.

In May last year, industrial production had expanded by 6.3% under the revised series.

The quick estimate of the IIP stood at 122.7 in May 2026, compared with 116.7 a year earlier.

Manufacturing, which accounts for nearly four-fifths of the index, grew 5.5% in May, while electricity and gas supply output rose 9.9%. Mining and quarrying contracted 1.6%.

Within manufacturing, 16 of 23 industry groups posted growth from a year earlier.

The biggest contributors to manufacturing growth were motor vehicles, trailers and semi-trailers, which grew 14.5%, followed by electrical equipment at 20.8% and basic metals at 4.6%.

Passenger cars, auto components and commercial vehicles were among the major contributors to growth in the automobile segment, while switchgear, transformers and uninterrupted power supply (UPS) systems supported growth in electrical equipment.

According to the use-based classification, capital goods output recorded the fastest growth of 12.9% in May.

Consumer durables output rose 7.2%, infrastructure and construction goods increased 5.9%, intermediate goods expanded 5.8%, consumer non-durables grew 3.6% and primary goods registered 2.6% growth.

The Ministry of Statistics and Programme Implementation said it has replaced the Wholesale Price Index (WPI) with the newly introduced Output Producer Price Index (Output PPI) as the deflator for compiling the IIP, saying the change would provide a more accurate measure of industrial output.

The revision affects 234 of the 463 item groups in the IIP basket, representing 36.02% of the index weight, where production data are reported in value rather than volume terms.

The ministry has revised the entire IIP series with base year 2022-23 to incorporate the new methodology, superseding the WPI-based series released on June 1.

The ministry said the adoption of Output PPI would improve the estimation of real industrial output because it provides a more granular measure of producer-level prices than the WPI.

The move is also in line with international best practices and recommendations of the Technical Advisory Committee on the base revision of IIP.

The June industrial output data will be released on July 28.