New Delhi: India's industrial production growth moderated to 6.7 percent in September 2026 from a revised 7.8 percent in August, weighed down by a sharper contraction in mining activity and slower manufacturing expansion, according to government data released on Wednesday.
The National Statistics Office (NSO) said the Index of Industrial Production (IIP) grew 6.7 percent year-on-year in September, compared with the earlier quick estimate of 8 percent for August, which has now been revised to 7.8 percent following the incorporation of updated production data.
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The latest figures are based on the revised IIP series with 2022-23 as the base year, introduced in April 2026.
Despite the moderation, industrial production maintained relatively strong growth, with the index expanding 6.8 percent during the first half of FY27.
Mining and quarrying emerged as the weakest segment, with output contracting 6.2 percent in September, compared with a 4.6 percent decline in August.
Manufacturing, which accounts for nearly 76 percent of the index, grew 7.6 percent, slowing from 8.6 percent in the preceding month.
The electricity and gas supply sector recorded a robust 11.2 percent year-on-year expansion in September, although its growth moderated compared with August. Growth in water supply, sewerage and waste management activities also eased.
The persistent contraction in mining is particularly significant because the sector supplies essential raw materials to steel, cement, power and other core industries. Continued weakness could raise concerns about raw material availability and industrial supply chains, although the latest data alone do not establish any widespread supply disruption.
Within manufacturing, 17 of the 23 industry groups registered positive growth in September, indicating that the expansion remained relatively broad-based despite the overall slowdown.
According to the NSO, the three largest positive contributors were the manufacture of motor vehicles, trailers and semi-trailers; electrical equipment; and rubber and plastics products.
The performance suggests that automobile-related manufacturing and electrical equipment production continued to provide important support to industrial activity.
The use-based classification showed divergent trends across industrial categories.
| Industrial category | September growth |
|---|---|
| Primary goods | 4.0 percent |
| Capital goods | 10.4 percent |
| Intermediate goods | 12.2 percent |
| Infrastructure and construction goods | 7.2 percent |
| Consumer durables | 6.0 percent |
| Consumer non-durables | 1.4 percent |
Intermediate goods, primary goods and capital goods were the three largest positive contributors to overall industrial production growth.
The double-digit expansion in capital goods, which include machinery and equipment used for production, points to continued activity in investment-linked industries.
However, consumer non-durables grew just 1.4 percent, suggesting that production of everyday consumption goods remained relatively subdued.
Ranen Banerjee, Partner and Leader, Economic Advisory at PwC India, attributed the moderation partly to the contraction in mining and quarrying, along with slower growth in consumer durables and capital goods.
"The higher output in the previous month of August in anticipation of festive sales and anticipation of progressive wearing off of the GST rationalisation-related consumption uplift and consequent high base of previous year could be major factors impacting the print," he said.
Banerjee also suggested that concerns over rising inflation and its potential impact on consumer demand may have influenced manufacturers' production planning.
Dipti Deshpande, Senior Director and Principal Economist at Crisil, maintained that industrial activity remained resilient despite the slowdown.
"While growth eased from August's 7.8 per cent, the moderation was largely due to a statistical high-base effect, along with some sequential softening in mining and electricity output," she said.
Devendra Pant, Chief Economist at India Ratings and Research, similarly attributed the moderation to the base effect and negative mining growth.
"Ind-Ra is of the view that IIP growth could improve in October 2026 in the range of 8-9 per cent due to the base effect in the overall index and especially for the manufacturing and electricity sector," Pant added.
The September data present a mixed picture of India's industrial economy. Manufacturing continues to expand, supported by automobiles, electrical equipment and intermediate goods, while capital goods production remains relatively strong.
However, the deepening mining contraction, slower manufacturing growth and weak consumer non-durables output underline uneven momentum across sectors.
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For policymakers, the key question will be whether investment-linked industrial activity can sustain its momentum while mining output recovers and consumer demand strengthens.
The October IIP figures will provide a clearer indication of whether September's moderation was primarily a temporary statistical effect or an early sign of slowing industrial momentum.
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