IIP growth slows to 4.9% as new data shows decline in mining activity

Worker on steel processing production line in factory. File | Photo credit: Reuters

Industrial production, as measured by the Index of Industrial Production, grew by 4.9% in April 2026, slower than 5.8% in the same period last year, according to a new IIP series released on Monday (June 1, 2026). The IIP series, which till now had 2011-12 as its base year, has now been updated to 2022-23.

In the new series, coverage has been expanded to include gas and water supply, sewerage and waste management in the existing core categories of mining and quarrying, manufacturing and electricity. Of the four sector indices, three grew at a slower pace and one contracted year-on-year in the reporting month, with mining and quarrying production falling more than 5% in April 2026. Manufacturing output rose 6.2% in the reporting month, slightly slower than 6.3% in 2025.

Within the manufacturing sector, which accounts for about 75% of the IIP goods basket, six industries contracted, including major ones such as the production of “coke and refined petroleum products”, which fell by 0.4%, and the “apparel” industry, which saw output fall by 7%. The most significant decrease was in the production of wooden products other than furniture, with a decrease in production of 12.5%.

The rest of the industry categories within the manufacturing sector grew, with electrical equipment manufacturing up 19.2% in April 2026.

According to the use-based classification, this series classifies the industry into primary goods, capital goods, intermediate goods, infrastructure/construction goods, durable goods and non-durable goods.

Growth in three of the six categories slowed year-on-year in April 2026. Primary goods, durable goods, and non-durable goods grew by 0.8%, 4.3%, and 2.8%, respectively, in April 2026, slower than the same month in 2025. The production of intermediate goods grew faster by 0.19%, reaching a growth rate of 7.7% in April 2026 compared to the same month of the previous fiscal month.

Growth in the production of capital goods and infrastructure goods accelerated to 16% and 7.1% in the reporting month, respectively, compared to the same month of the previous fiscal.

The base years of the main macroeconomic indicators, which had base years of 2011-12, were revised in 2026 starting with GDP. The IIP is the last of the measures to be revised to 2022-23 as the base year. The dataset will assume that the index will be 100 in 2022-2023 and then calculate the growth rate of the index in subsequent years.

In addition to adding new sector divisions, the new series also brings “enhanced granularity.” For example, the mining sector index will now include classification of data for fuel minerals, metallic minerals, including rare earth minerals, and non-metallic minerals, including minerals. Similarly, the electricity index was divided into renewable and non-renewable sources.

The new basket of goods for calculating the IIP consists of 1,042 products mapped to 463 item groups. The older series had only 839 items mapped to 407 item groups. Further, the weights given to each sector and each industry within the manufacturing sector have been revised in line with the updated 2022-23 Gross Value Added (GVA) series.

The new series also allowed users to link the old and new data series using a formula to ensure comparability.

Published – 01 Jun 2026 18:55 IST