India's Industrial Output Grows 5.1% in May, Capital Goods Lead Investment Push: PHDCCI

India's industrial production expanded by 5.1% year-on-year in May 2026, driven by robust growth in manufacturing and capital goods, according to the latest Index of Industrial Production (IIP) data. The figures point to sustained momentum in industrial activity and strengthening investment-led growth across key sectors.

The overall IIP rose to 122.7 in May 2026 from 116.7 in the corresponding month last year. Manufacturing, which accounts for more than three-fourths of the IIP, registered a growth of 5.5%, while the Electricity and Gas Supply segment recorded a strong 9.9% increase. However, the Mining and Quarrying sector contracted by 1.6%.

Commenting on the data, PHD Chamber of Commerce and Industry (PHDCCI) President Rajeev Juneja said the latest figures reflect continued resilience in India's manufacturing sector and investment activity. He also welcomed the Ministry of Statistics and Programme Implementation's decision to replace the Wholesale Price Index (WPI) with the newly introduced Output Producer Price Index (Output PPI) as the deflator for value-based manufacturing items. According to him, the revised methodology, covering nearly 36% of the IIP basket, will provide a more accurate measure of real industrial output and align India's industrial statistics with global best practices.

Among manufacturing industries, electrical equipment emerged as the fastest-growing segment with a 20.8% rise in output, followed by motor vehicles, trailers and semi-trailers at 14.5%, and basic metals at 4.6%, indicating healthy demand across infrastructure, automotive and industrial value chains.

The use-based classification also reflected broad-based expansion. Capital Goods posted the highest growth at 12.9%, followed by Consumer Durables (7.2%), Infrastructure and Construction Goods (5.9%), and Intermediate Goods (5.8%), suggesting continued investment activity alongside improving industrial demand.

PHDCCI Secretary General and CEO Dr. Ranjeet Mehta said the strong performance of manufacturing and capital goods highlights improving investment sentiment and expanding industrial capacity. While he noted that the decline in mining output points to supply-side challenges, he said the government's continued emphasis on infrastructure development, manufacturing competitiveness, logistics efficiency and ease of doing business has helped sustain industrial momentum and strengthen India's position in global value chains.

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