India's industrial output growth slowed to a five-month low of 4.1% year-on-year in March, down from 3.9% recorded in the same month a year ago, according to government data released on Tuesday. The Index of Industrial Production (IIP) stood at 173.2 in March, up from 166.3 a year earlier. The National Statistics Office (NSO) also revised February 2026 industrial growth to 5.1% from the provisional estimate of 5.2% released earlier. The previous low in IIP growth was recorded in October 2025, when output had risen just 0.5%. For the full financial year 2025-26, industrial production growth remained nearly flat at 4.1% compared with 4% in the previous year.
Manufacturing output rose 4.3% in March, while mining output expanded 5.5%, providing partial support to overall growth. The electricity generation sector's weak performance significantly dragged down the overall industrial output growth. The indices for mining, manufacturing and electricity sectors were recorded at 166.8, 169.4 and 221.3, respectively. Power generation rose only 0.8% in March against 7.5% growth in the corresponding period last year, weighed down by the Middle East crisis impact.
Within manufacturing, 14 of 23 industry groups posted growth, led by basic metals, motor vehicles and machinery. Output of motor vehicles, trailers and semi-trailers surged 18.1%, while basic metals grew 8.6% and machinery and equipment rose 11.2%. Infrastructure and construction goods, capital goods and primary goods were the top contributors to overall IIP growth in March, with capital goods output jumping 14.6% year-on-year. Under the use-based classification, growth rates showed 2.2% in primary goods, 14.6% in capital goods, 3.3% in intermediate goods, 6.7% in infrastructure and construction goods, 5.3% in consumer durables, and 1.1% in consumer non-durables.
Consumer durables output increased 5.3%, while non-durables – a proxy for everyday consumption – edged up just 1.1%. Infrastructure and construction goods grew 6.7%, while intermediate goods rose 3.3%. The data showed robust capital expenditure trends, with use-based data pointing to continued strength in investment-linked and core sectors. Manufacturing sector output, which carries the highest weight in the index, expanded 4.3% in March 2026 compared with 4% in the year-ago month.
The IIP data are provisional and subject to revision as more information becomes available to the government. The industrial output data for April is scheduled to be released on June 1. The current data reflects the ongoing economic trends in India's manufacturing and industrial sectors, with electricity generation remaining a key concern for overall industrial growth momentum amid the Middle East crisis impact.
