India’s industrial activity, as measured by the Index of Industrial Production (IIP), moderated to 6.7% in September, the lowest in four months, according to data released by the National Statistics Office (NSO) on Wednesday. The reading fell short of the Bloomberg poll of economists which had expected growth of around 7.3%. The reduction was broad-based, with most sectors recording weaker growth in September than in August, whether classified by economic activity or by use. The exception was consumer non-durables under the use-based classification, which recorded stronger growth.
To be sure, IIP growth for the April-September 2026 period stood at 6.8%, higher than the 4.4% recorded in the same period last year.
Under the economic activity-based classification, manufacturing, which has the highest weight at 76%, recorded growth of 7.6% in September, compared with 8.6% in August. Seventeen of the 23 manufacturing industry groups recorded positive growth, with eight posting double-digit growth in September. Growth was led by beverages (39%), electrical equipment (34%), rubber and plastic products (20%), transport equipment (19%) and motor vehicles, trailers and semi-trailers (19%). The contraction in mining and quarrying deepened to 6.2% in September from 4.6% in August. This was the sector’s steepest contraction in the new series (2022-23), for which yearly growth data is available from April 2024. Electricity and gas supply was the only sector to record double-digit growth, at 11.3% in September according to the use-based classification, a trend it has followed since May 2026 except in July, when growth moderated to 8.2%. Water supply; sewerage and waste management growth weakened to 5.9% in September.
Under the use-based classification, growth in primary goods moderated marginally to 4% in September from 4.2% in August. Intermediate goods recorded 12.2% growth in September compared to 14.2% in August. Consumer goods recorded 3.4% growth in September and its sub-components, consumer durables and non-durables recorded 6% and 1.4% growth, respectively. Capital goods saw the sharpest decline, falling by 5.5 percentage points in September (10.4%) from August (15.9%). Infrastructure goods recorded 7.2% growth in September.
{{/usCountry}}Under the use-based classification, growth in primary goods moderated marginally to 4% in September from 4.2% in August. Intermediate goods recorded 12.2% growth in September compared to 14.2% in August. Consumer goods recorded 3.4% growth in September and its sub-components, consumer durables and non-durables recorded 6% and 1.4% growth, respectively. Capital goods saw the sharpest decline, falling by 5.5 percentage points in September (10.4%) from August (15.9%). Infrastructure goods recorded 7.2% growth in September.
{{/usCountry}}“As many as five of the six use-based segments, barring consumer non-durables, witnessed a moderation in their YoY growth in September 2026 vis-à-vis August 2026. Notably, the output of capital goods and intermediate goods reported double-digit growth for the sixth and fifth consecutive months, respectively,” said Aditi Nayar, chief economist at ICRA.
“Going ahead, industrial activity is likely to face headwinds from geopolitical uncertainties, volatile energy prices, supply-chain disruptions, and rising input costs. Moreover, concerns over rural demand remain amid the deficient southwest monsoon and the associated risks to agricultural output. The emerging inflationary pressures could erode purchasing power and may affect overall demand,” said Rajani Sinha, chief economist at CareEdge Ratings.