Mining Slump Drags India's Industrial Output Growth to 6.7%
India's industrial production growth dipped to 6.7% in September as mining output contracted, though manufacturing remained a strong driver.
India's industrial output growth experienced a dip in September, slowing to 6.7 per cent compared to the 8 per cent recorded in August. According to the latest data released by the government, the primary catalyst for this slowdown was a significant contraction in the mining sector, which offset the gains made by other key industrial drivers.
The Mining Drag and Overall IIP Trends
The Index of Industrial Production (IIP), which is compiled by the Ministry of Statistics and Programme Implementation, stood at 124.3 in September, rising from 116.5 in the same month last year. However, the momentum was hindered by the mining and quarrying sector, which saw a year-on-year contraction of 6.2 per cent in September, a steeper decline than the 4.6 per cent drop seen in August.
Manufacturing and Energy: The Silver Lining
Despite the struggle in mining, the manufacturing sector—which holds the most significant weight in the IIP at 76.062 per cent—continued to provide essential support. Manufacturing output grew by 7.6 per cent in September, although this was a slight decrease from the 8.6 per cent growth seen in August.
Other utility sectors also showed strong performance:
- Electricity and gas supply: Recorded a robust growth of 11.2 per cent.
- Water supply, sewerage, and waste management: Expanded by 5.8 per cent.
Winning Sectors within Manufacturing
The manufacturing landscape remained largely positive, with 17 out of 23 industry groups reporting growth. A few standout performers drove the numbers upward:
- Electrical Equipment: The strongest contributor, skyrocketing by 33.9 per cent year-on-year.
- Rubber and Plastics: Grew by 19.9 per cent.
- Motor Vehicles: Including trailers and semi-trailers, this segment grew by 19 per cent, fueled by the production of commercial vehicles, passenger cars, and auto components.
Use-Based Classification: Where the Growth Lies
When breaking down the production based on the use of the goods, the data reveals a strong appetite for industrial and capital assets:
- Intermediate Goods: Led the way with a 12.2 per cent increase.
- Capital Goods: Expanded by 10.4 per cent.
- Infrastructure and Construction Goods: Grew by 7.2 per cent.
- Consumer Durables: Recorded a 6 per cent increase.
- Consumer Non-durables: Saw a modest rise of 1.4 per cent.
The ministry highlighted that intermediate, primary, and capital goods were the three largest positive contributors to the overall IIP growth under this classification.
The Bigger Picture: H1 Performance
While September saw a slight deceleration, the broader trend for the current financial year remains positive. For the period between April and September of the financial year 2026-27, industrial production grew by 6.8 per cent, a marked improvement over the 4.4 per cent growth recorded during the same period in the previous financial year.
The Ministry of Statistics and Programme Implementation has noted that the September figures are quick estimates and are subject to revision as more comprehensive production data becomes available. The next update, covering October 2026, is expected to be released on November 30.