Overview
The IIP rose to a five‑month peak of 5.1% in May 2026, up from 4.9% in April. The rise follows a sharp rebound after the West Asia crisis that began in March 2026. While manufacturing grew at 5.5%, consumer durables and non‑durables also posted multi‑month highs, suggesting a mixed picture of domestic demand and export‑driven growth.
Key Developments
- May 2026 IIP growth reached 5.1%, the highest since January 2026.
- Manufacturing sector growth slowed slightly to 5.5% from April’s 5.7%.
- GST revenues from domestic transactions grew slower over the last six months, indicating weaker internal demand.
- Merchandise exports hit a four‑year high in April and an all‑time high in May 2026.
- MoSPI replaced the WPI with the PPI as the deflator for certain sectors.
- The core‑sector index recorded its second‑lowest growth in 21 months, creating a discrepancy with the IIP.
Important Facts
1. Domestic consumption shows mixed signals: consumer durables grew, but GST collections from domestic sales lagged, hinting at uneven demand.
2. Export performance was robust, with merchandise exports reaching record levels, underscoring India’s reliance on external markets.
3. Methodology change: MoSPI’s shift from WPI to PPI aims for better price deflation but was implemented after the new data series launched on 1 June 2026, raising questions about procedural consistency.
4. Core‑sector vs IIP: The divergence suggests that while overall industrial output app