India’s industrial growth surges to 8 pc in August, manufacturing sector shines

India’s manufacturing sector continued to drive industrial activity in August, registering 9% growth compared with the same month a year earlier. The sector accounts for more than three-fourths of the country’s Index of Industrial Production (IIP).

According to an official statement, manufacturing has now recorded growth of at least 8% for three consecutive months, marking a strong run for the sector.

The sustained expansion is significant for the wider economy, particularly given manufacturing’s role in generating employment opportunities for graduates emerging from engineering institutions and universities across the country.

Within the manufacturing segment, 18 of the 23 industry groups recorded year-on-year growth during the month. Electrical equipment manufacturing posted the strongest increase at 30.9%, followed by machinery and equipment at 25.3% and motor vehicle manufacturing at 25.2%.

Electricity generation and related supply activity also recorded strong growth in August, expanding 12.3% from a year earlier. The water supply, sewerage and waste management segment grew 6.3%.

Mining, however, remained a drag on overall industrial activity, contracting 5.6% during the month.

Data based on use-based classification showed particularly strong growth in capital goods production. Output in the segment, which includes machinery and equipment used by factories, increased 16.9% in August. Capital goods production is closely watched as an indicator of investment activity, with higher investment potentially supporting employment and income generation across the economy.

Consumer durables also registered double-digit growth, rising 11.1% during the month. The category includes products such as electronic goods, refrigerators and televisions, with the increase indicating stronger demand for these products. Consumer non-durables, including items such as soaps and cosmetics, grew 2.1%.

Infrastructure and construction goods recorded 6.4% growth in August. The segment has benefited from continued government spending on large infrastructure projects, including highways, ports and railway development.

Meanwhile, the Ministry of Statistics has changed the deflator used for certain components of the IIP. Output Producer Price Index (PPI) has been adopted in place of the Wholesale Price Index (WPI) for item groups where output is collected in value terms.

The change affects 234 of the 463 item groups included in the IIP basket, representing 36.02% of the index’s total weight.

The ministry has subsequently revised and released the complete IIP 2022-23 series using Output PPI. The revised series replaces the earlier WPI-based version released on June 1, 2026.

The Ministry of Statistics and Programme Implementation (MoSPI) had originally released the new All India Index of Industrial Production series, with 2022-23 as the base year, on June 1, 2026, using WPI as the deflator.