September 2026 IIP Growth Eases to 6.70%

IIP GROWTH FOR SEPTEMBER 2026 HIT BY BASE EFFECT

September 2026 IIP growth at 6.70% was lower compared to 7.79% in August. Remember, the August IIP has already undergone a downward revision of 18 bps from 7.97% to 7.79%. In fact, the September IIP growth has dropped below the 7% level for the first time in the last 4 months. Cumulative IIP growth for first 6 months remains robust at 6.8%.

One of the reasons for the lower IIP growth in September was the base effect. For instance, between August 2025 and September 2025, the IIP growth had risen sharply from 4.67% to 6.10%. This base effect was partly responsible for the lower IIP growth. However, next month, the base effect is expected to be highly favourable for IIP growth. September 2026 again saw mining IIP lag, while manufacturing IIP and Electricity IIP remained robust.

Data Source: MOSPI

Let us turn to some of the key takeaways from the September 2026 IIP data.

WHAT WE READ FROM THE BREAK-DOWN OF IIP GROWTH FOR SEP-26?

For September 2026, mining output dipped by -6.2%. While fuel minerals were flat, metallic rare earth minerals saw robust output growth. However, the negative thrust came from non-metallic minerals and minor minerals, which contracted -29.2%.

Manufacturing IIP was lower, but robust, at 7.6% in Sep-26. Its 76.06% weight makes it a big impact factor. A total of 17 out of 23 manufacturing groups showed positive growth; led by Motor vehicles, Electrical Equipment, and Rubber & Plastic Products.

Under Motor Vehicles; auto components, accessories, PVs, and CVs showed strong growth. Under Electrical Equipment, strong growth was seen in switchgears, circuit breakers, control panels, meters etc. In the Rubber/Plastics group, growth was visible in LMV tyres, V-Belts, and Rubber Conveyors.

In electricity, traditional thermal energy outpaced renewable electricity generation by a huge margin, while gas output contracted. The water segment continues to be dominated by growth in the sewage and waste management segment.

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

SEPTEMBER 2026 AND FY27 IIP: DISSECTING IIP BASKET

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

The cumulative IIP growth for FY27 at 6.8% indicates a robust performance by the Indian economy, despite the geopolitical turmoil. This has been largely led by manufacturing IIP growing at 7.6%. What is gratifying is that this growth is despite the supply chain constraints that have been caused by the ongoing war and geopolitical turmoil in the Middle East.

KEY TAKEAWAYS FOR INVESTORS FROM IIP DATA

The IIP number of 6.70% is the real IIP growth, net of inflation. MOSPI uses PPI Inflation (updated version of WPI) as the IIP deflator. IIP has averaged 6.8% in FY27 and that means; the nominal IIP is sharply higher. The real impact will be visible in the third and fourth quarters of FY27 as inflation level tapers.

Let us look at the significant momentum drivers of manufacturing in September 2026. The positive thrust came from products like Beverages, Electrical Equipment, Plastic Products, Transport Equipment, Textiles, Furniture, and Metal Products.

What about pressure points on IIP in September 2026? There was pressure on Wood Products, Wearing Apparel, Pharmaceuticals, and other manufacturing. The pressure on the export driven segments has been reducing in recent months, despite the unrest.

The IIP figure for September underlines 2 things. India is broadening its export base, in terms of the product basket as well as the target countries. Secondly, the strong domestic market has been a major driving factor acting as a hedge against export risks.