IIP GROWTH FOR MARCH 2026 – LOWEST IN 5 MONTHS

IIP GROWTH FOR MARCH 2026 – LOWEST IN 5 MONTHS

Since the time IIP growth had dipped to a low of 0.53% in October 2025, the month of March 2026 saw the slowest IIP growth at 4.15%. The IIP growth for February 2026 was revised lower by 13 bps from 5.23% to 5.10%. It may be recollected that earlier, the January IIP growth had been revised up by 28 bps from 4.86% to 5.14%. The fall in IIP in March 2026 could be attributed to the geopolitical unrest as well as on the base effect; as the IIP growth had surged from 2.72% to 3.94% in the year-ago period. Here is a quick IIP snapshot.

Data Source: MOSPI

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

For March 2026, the Mining IIP was sharply higher at 5.5%. However, manufacturing IIP (with the highest weightage of 77.6%), fell from 5.9% to 4.3%; while the electricity output also fell from 2.3% to 0.8%. Manufacturing put the maximum stress on IIP.

If you look at the growth narrative, the US Iran war has spoiled the show for export items like textiles and leather. At the same time, global input dependent import items like chemicals and metals also got hit due to supply chain constraints.

The cumulative IIP for the fiscal year FY26 stayed flat at 4.1%. For the full year, manufacturing IIP growth at 5.0% has been robust; while mining at 1.4% and electricity at 1.0% were the lagging stories. Manufacturing was robust in a tough year.

If you look at use-based segments of IIP, even consumer non-durables showed positive growth in March 2026 and also for full fiscal FY26. Among user segments capital goods grew in double digits and led in March; while infrastructure user group was the leader for the fiscal year FY26 as a whole.

Let us now turn to the granular growth of the 23 products in the IIP basket.

MARCH 2026 AND FY26 IIP: DISSECTING IIP BASKET

The table captures comparative IIP growth for last 3 months, with respective components.

Data Source: MOSPI (FY26 data for full 12 months)

With so much of IIP numbers, let us turn to some interesting insights that emerge from the IIP table for the last 3 months and for FY26 overall. The FY26 data in the last column reflects the full-year IIP data for financial year 2025-26.

KEY TAKEAWAYS FOR INVESTORS FROM IIP DATA

The big thrust to the IIP growth in March 2026 has come from domestic-driven sectors like Transport Equipment, Motor Vehicles, Machinery, basic metals, and paper.

For March 2026, the pressure was quite intense on certain export sectors like wearing apparel, beverages, leather products, wood products, chemicals, and electronics.

Positive momentum in March 2026 was seen in pharmaceuticals, refined petroleum, plastic products, fabricated metals, and machinery. Negative momentum was seen in food, textiles, leather, wood, paper, chemicals, non-metallic minerals, electronics etc.

For the full year FY26; the big IIP growth drivers were; Motor Vehicles, Basic Metals, Transport Equipment, wood, and tobacco products. The full-year IIP pressure points were Other Manufacturing, Wearing Apparel, Leather Products, and beverages.

It must be said that despite the massive supply chain constraints created by the US-Iran war and the drying up of trade flows through the Straits of Hormuz; India has been relatively better off. The strong domestic market is standing up to the growth story; for now!