India's industrial output grows 5.1% in May, manufacturing and electricity sectors drive expansion

India's industrial sector demonstrated robust growth in May 2026, with the Index of Industrial Production (IIP) rising by 5.1% compared to the same period last year. This expansion was primarily fueled by significant gains in the manufacturing and electricity generation segments, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).

The manufacturing sector, a key driver of the Indian economy, recorded a year-on-year growth of 5.5%. The electricity and gas supply sector also showed impressive performance, with a strong increase of 9.9%. However, the mining and quarrying sector experienced a slight contraction, decreasing by 1.6% during the month. The Quick Estimate of the IIP reached 122.7 in May 2026, up from 116.7 in May 2025.

In parallel with the growth figures, MoSPI announced a significant methodological update in its IIP compilation. The ministry has transitioned to using the Output Producer Price Index (Output PPI) as the deflator for the new IIP series, which now has a base year of 2022-23. This change replaces the previously used Wholesale Price Index (WPI) and affects approximately 36% of the total index weight across 234 industry groups. MoSPI stated that Output PPI offers a more detailed price structure, enhancing the accuracy of real output estimations for value-based production items and aligning with international best practices.

Analysis of the manufacturing sector revealed positive growth in 16 out of 23 industry groups. Notably, the "Manufacture of motor vehicles, trailers and semi-trailers" surged by 14.5%, "Manufacture of electrical equipment" grew by 20.8%, and "Manufacture of basic metals" increased by 4.6%. Capital goods led the use-based classification with a 12.9% growth, followed by consumer durables (7.2%) and infrastructure and construction goods (5.9%).