India's Index of Industrial Production (IIP) rose 6.7 per cent year-on-year in September 2026, driven by a 7.6 per cent expansion in the manufacturing sector and a robust 11.2 per cent surge in electricity and gas supply, according to official data released on Wednesday, 28 October 2026. The headline print marks a moderation from the 8.0 per cent quick estimate recorded in August.

Key Sector Readings

The overall IIP index stood at 124.3 in September 2026, up from 116.5 in September 2025. Sector-wise, the indices for Mining and Quarrying, Manufacturing, Electricity and Gas Supply, and Water Supply, Sewerage and Waste Management came in at 90.4, 128.0, 128.6, and 146.4, respectively.

Manufacturing: Top Performers

Within manufacturing, 17 out of 23 industry groups at the NIC 2-digit level posted positive growth in September 2026 over September 2025. The three strongest contributors were the manufacture of electrical equipment (up 33.9 per cent), rubber and plastics products (up 19.9 per cent), and motor vehicles, trailers and semi-trailers (up 19.0 per cent).

Growth in motor vehicles was underpinned by auto components, passenger cars, and commercial vehicles. In electrical equipment, switchgear and circuit breakers, UPS and solid-state drives, and end-face connectors for optical fibres and cables were the standout contributors — reflecting continued capital investment in power infrastructure and digital connectivity.

Use-Based Classification Breakdown

According to the use-based classification, Capital Goods led with an index of 153.4, followed by Infrastructure and Construction Goods at 133.0, Consumer Durables at 133.1, and Intermediate Goods at 131.7. Primary Goods stood at 111.6, while Consumer Non-Durables came in at 111.8. The top three positive contributors to overall IIP growth under this classification were Intermediate Goods, Primary Goods, and Capital Goods.

Methodology Revision

The data also reflects a significant methodological update: the Ministry of Statistics and Programme Implementation (MoSPI) has decided to adopt output Producer Price Index (PPI) as a deflator in place of the Wholesale Price Index (WPI) for item groups where output is collected in value terms. This change affects 234 out of 463 item groups in the IIP basket, representing 36.02 per cent of the total index weight. The new IIP series — with a base year of 2022–23 — was launched on 1 June 2026.

What This Signals

The September print, while lower than August's 8.0 per cent, remains broadly healthy. The strong uptick in electrical equipment and motor vehicles points to sustained domestic demand and infrastructure spending. This comes amid an environment of relatively stable input costs, which has supported margins in capital-intensive sectors. The high Capital Goods index reading at 153.4 is a particularly encouraging sign, as it often presages broader investment activity in the months ahead.

Markets and policymakers will watch October's IIP print closely to see whether the September moderation from August levels represents a trend or a one-month blip, with festive-season demand expected to provide a tailwind in the near term.