Industry Odisha Bureau,Sep 28: India’s industrial output grew 8% in August, outpacing July’s revised 7.4%. Manufacturing expanded 9%, while capital goods climbed 16.9%. Mining contracted and consumer non-durables lagged, leaving growth uneven.
Investment goods, rather than everyday staples, did the heavy lifting in August. Capital goods output rose 16.9%, while intermediate goods gained 13.7%.
India’s Index of Industrial Production (IIP) grew 8.0% year-on-year. That beat July’s revised 7.4% and the 4.7% recorded in August 2025. The Ministry of Statistics and Programme Implementation (MoSPI) released the provisional data.
Manufacturing gains breadth
Manufacturing remains the engine of India’s industrial output. The sector carries 76.062% of the index’s weight.
Its growth accelerated to 9% in August, from 8.2% in July. A year earlier, manufacturing had grown just 3.6%. The sector has now expanded at least 8% for three straight months.
Growth was also broad-based. Eighteen of 23 manufacturing groups recorded gains. Electrical equipment led, rising 30.9%. Other transport equipment grew 25.3%, while motor vehicles and trailers climbed 25.2%. Rubber and plastics, beverages, textiles and fabricated metals also contributed.
Capital goods signal investment strength
The use-based data sharpen the investment story. Infrastructure and construction goods also grew 6.4%.
Devendra Pant, chief economist at India Ratings and Research, highlighted these segments. He linked their strength to rising investment activity. Madan Sabnavis, chief economist at Bank of Baroda, noted broad-based industrial credit growth. Still, a single month cannot confirm a durable investment cycle.
Consumption sends a mixed signal
Consumer-facing output told a more divided story. Consumer durables rose a healthy 11.1%. Consumer non-durables, however, grew only 2.1%. Primary goods managed 3.5%.
The gap suggests comparatively softer momentum in everyday goods. It does not, on its own, signal weak household spending.
Mining breaks from the trend
Mining and quarrying contracted 5.6% in August. That followed a 0.9% decline in July. The sector had grown 15.8% a year earlier. August falls within the monsoon, when weather can disrupt mining.
Power moved the other way. Electricity generation and gas supply grew 12.3%, up from 8.7% in July. Water supply, sewerage and waste management rose 6.3%.
India’s nine core industries, nearly a third of IIP weight, grew 4.8%. That was slightly slower than July’s 5%.
Momentum builds, risks remain
Economists read the data as encouraging, with caveats. Sabnavis said IIP growth over five months stood at 6.7%. He said sustaining that pace could deliver 7–8% annual growth. Festive-season demand, he added, could provide support.
Rahul Agrawal, principal economist at Icra, said growth averaged 7.7% in July-August. That compares with 6.2% in the first quarter of FY27. He said stronger volumes could partly offset commodity-price pressures on second-quarter GDP.
India Ratings expects September growth near 6%, citing base effects.
A new measure for a changing economy
August marked the fifth reading under the revised IIP series. The base year moved to 2022-23 from 2011-12. It is the tenth such revision since the index began in 1937.
The new series tracks 463 item groups, up from 407. These map to 1,042 products, including 120 new additions. Aircraft parts, stents, CCTV cameras and vaccines now feature. Sixty-four outdated items, including kerosene and CFL lamps, left the basket.
Coverage now extends to gas, water supply and waste management. Renewable and non-renewable electricity are tracked separately.
Breadth matters more than the headline
The 8% headline matters less than its composition. Manufacturing, electricity and investment-linked goods showed clear strength. Mining and consumer non-durables lagged behind. Coming months will test whether that breadth endures.
