IIP GROWTH FOR AUGUST 2026 – MANUFACTURING EDGE

IIP GROWTH FOR AUGUST 2026 – MANUFACTURING EDGE

With the August IIP growth coming in at 7.97%, the average IIP in the last 3 months is now above 8.0%. In addition, there was also a 68-bps upgrade of July IIP growth from 6.67% to 7.35%. It may be recollected that even the June IIP had been upgraded by an impressive 156 basis points. One has to wait and see if August 2026 IIP also gets an upgrade.

When we talk of a rebound in IIP in August, the base effect also played a part. Between July 2025 and August 2025, the IIP moved down from 5.41% to 4.67%. This also contributed to the bounce in the IIP. For the month of August, while mining output continued to lag, it was a sharp rebound in the manufacturing output that took the IIP closer to the 8.0% mark.

Data Source: MOSPI

What are the key takeaways from the August 2026 IIP data?

For August 2026, mining output dipped by -5.6%. Mining output across India has been impacted by seasonal weather disruptions, retrospective tax disputes, state level charges, limited mineral blocks, environmental clearances, and rail congestion.

Manufacturing IIP growth was robust at 9.0% in August 2026; which is 80-bps better than July. Its 76.06% weightage in the overall IIP basket makes it a big impact factor. A total of 18 out of 23 manufacturing groups showed positive growth; with the leaders being Motor vehicles, other transport equipment, and electrical equipment.

Withing the manufacturing head of motor vehicles; auto components, passenger cars, and CVs showed strong growth. Under the Electrical Equipment header, strong growth was seen in switching apparatus, switchgears, circuit breakers, control panels etc. Strong growth was also seen in UPS and end-face connectors for optical fibre cables.

On the mining front, rare earths continued to show robust growth, while fuel oils and non-metallic minerals came under pressure. In electricity, renewable energy and traditional thermal electricity generation saw robust growth in August 2026. The water segment continues to be dominated by the sewage and waste management segment.

Let us now turn to the granular growth of the 4 sub-baskets in the IIP story.

AUGUST 2026 AND FY27 IIP: DISSECTING IIP BASKET

The table the new series IIP growth for latest 3 months, with the FY27 update.

The cumulative growth for FY27 indicates a robust performance by the Indian economy, despite the geopolitical turmoil. In terms of positive vibes in FY27; double-digit growth is seen in Rare Earths, textiles, plastic products, metal products, electronic products, electrical equipment, and motor / transport vehicles.

KEY TAKEAWAYS FOR INVESTORS FROM IIP DATA

The IIP number of 7.97% is the real IIP growth, net of inflation. The MOSPI uses PPI Inflation (updated version of WPI) as the IIP deflator. However, IIP has been around 9.8% in recent months and that means; the nominal IIP is sharply higher. We could see that impact trickling in, once the overall level of inflation moderates in Q3 and Q4 of FY27.

Let us look at the momentum drivers in manufacturing in August 2026; with its weight of over 76% in IIP basket. The positive thrust came from products like Beverages, Textiles, Wood Products, Leather Products, metals, electronic products, electrical goods, and motor vehicles. Several export-sectors showed signs of revival, despite geopolitical risk.

What about negative momentum drivers of IIP in the month of August 2026? There was pressure on Fuel Minerals, non-metallic minerals, tobacco products, wearing apparel, refined petroleum, chemical products, and gas supply. Higher shipping costs and geographical restrictions played a major part.

The IIP figure for August shows two things. India is broadening its export base, especially in segments like electronic products and electrical equipment. Secondly, the strong domestic market continues to be the saving grace, amid tough global conditions!