The Index of Core Industries (ICI) has finally joined the country’s other economic metrics in becoming up-to-date and representative of the economy. The other metrics such as the national accounts, Consumer Price Index (CPI), Wholesale Price Index (WPI), and the Index of Industrial Production (IIP) were updated earlier this year, although even those were after considerable delays. The ICI has now joined their ranks with the June data being based on a new series with an updated base year, an additional sector being covered, and revised weights and methodologies. This is a welcome upgrade. The performance of these core industries is a vital barometer of the state of the economy. In the new series, the previous eight sectors have become nine, with the vital inclusion of the iron ore sector. Improvements have also been made to how the steel and coal sectors are measured in order to remove the previous double-counting that was taking place. The addition of a sector would naturally change the distribution of weights of the sectors in the index, but the final weights also reflect a broader shift in economic activity. The coal and natural gas sectors have seen their weights nearly halve to about 5.6% and 3.8%, respectively. On the other hand, the electricity sector now makes up more than 30% of the index from less than 20% in the previous series. All of this perhaps reflects the rising share of renewables in electricity generation, even as demand for electricity itself surges.

The performance of the index in June 2026, with a five-month-high growth of 5%, would suggest that Indian industry is shrugging off the slump induced by the West Asia crisis. However, two of the strong growth numbers — iron ore by 43.9% and electricity by 9.8% — were due to a statistical base effect since both sectors had contracted in June last year. It remains to be seen whether the numbers will remain this positive once that base effect wears off in the months ahead. The new series highlights some of the systemic issues that the old series did, such as the persistent contraction of the crude oil and natural gas sectors. They have contracted continuously for 18 and 24 months, respectively. If India does not have these resources, that is one thing. But if it has them and still is not able to extract them economically, then that is a serious shortcoming. The update of the ICI and the recent upgrade of the WPI would have been a good time for a broader statistical reorganisation. With the Ministry of Statistics and Programme Implementation handling the CPI and the IIP, it only makes sense for the WPI and ICI to move to it from their current home in the Ministry of Commerce and Industry. That change can still be made.

14 of the 19 sub-sectors in the trial and inaugural release of the government’s new Index of Services Production (ISP) witnessed double-digit growth in April 2026, with the best-performing sectors including accommodation and food, retail trade, administrative and support services, and real estate. 

The 19 sub-sectors measured account for about 60% of India’s services sector.

The ISP is meant to be the services sector counterpart to the Index of Industrial Production (IIP). While the IIP is released on the 28th of every month unless it is a weekend or holiday, the ISP will be released on the 29th henceforth. 

“The ISP represents an important milestone in strengthening India’s statistical system and improving the measurement of the services sector, which accounts for more than half of the country’s economic activity,” the Ministry of Statistics and Programme Implementation said in a release. 

“The release of sub-sectoral ISPs will provide, for the first time, a monthly measure of short-term movements in India’s formal services sector, with a coverage of about 60%,” it added.

While the inaugural release does not provide a composite growth rate for the entire index, this growth rate can be calculated using the sector-wise growth rates and weightages, DK Srivastava, chief policy advisor at EY India, said.

“Considering the year-on-year growth in April 2026 over that in April 2025, the 19-services sector growth is at 20.8%,” Mr. Srivastava said.

The top sub-sectors that reported strong growth in April 2026 were accommodation and food (37.2%), retail trade (30.8%), administrative & support services (28.7%), and real estate (27.7%). 

The base year of the trial ISPs has been set as 2024-25, and the index sources its data from several areas, including administrative data, Goods and Services Tax data, and the Annual Survey of Incorporated Services Sector Enterprises (ASISSE) data.

“The production of ISP by the MoSPI is a welcome development, providing high-frequency information regarding the most vibrant sector of the economy, namely the services sector, with adequate details about 19 sub-service sectors,” Mr. Srivastava said. 

“While the coverage is so far about 60% of the total services sector, it is expected that the coverage will progressively increase,” he added.

India’s latest industrial growth figures show that, contrary to global trends and overall perception, the country’s industrial output is getting stronger. Notably, the data show a quick bounce-back in industrial performance after the initial hit from the West Asia crisis. However, the new data also raise some important concerns about the composition of the growth, the systems behind the recent data upgrades, and the need for further improvements. Growth in the Index of Industrial Production hit a five-month high of 5.1% in May 2026, up from the 4.9% growth seen in April, which itself was a substantial improvement over the performance in March — the first full month after the West Asia crisis began. Within this, the manufacturing sector grew at a relatively robust 5.5% in May, albeit slower than in April. One view is that this is due to a revival in domestic consumption, since the consumer durables and non-durables sectors also grew at multi-month highs. Consumer durables, especially, have done well in April and May. However, the contrary argument is that domestic demand is in fact not doing well, and it is export growth that is leading to higher production. This is bolstered by the fact that GST revenues from domestic transactions have grown slower over the last six months than in 2025-26 and the year before that. Merchandise exports, on the other hand, hit a four-year high in April followed by an all-time high in May. It would certainly be welcome if India’s industry has global demand to fill, but the fact that more of this demand is not coming from within the country is a cause for concern. The economy is already hostage to world events.

The May IIP data were also accompanied by a note from the Ministry of Statistics and Programme Implementation (MoSPI) stating that it had made a major change to the methodology for computing growth for some sectors. It had abandoned the Wholesale Price Index as its chosen deflator to estimate the value of production in favour of the new Producer Price Index. This is a more accurate approach. But it did not, however, answer why this change was implemented belatedly and not when the new series of data was introduced on June 1. It suggests an unusually unsystematic approach by MoSPI. The strong growth in the IIP also does not reconcile with the fact that the Index of Eight Core Sectors — a separate government measure of industrial growth — grew at its second-lowest rate in 21 months in May. The core sector index is still outdated while the other major indices have been recently updated, but such a discrepancy nevertheless raises questions about what exactly is being measured.

Growth in industrial activity quickened to a five-month high of 5.1% in May 2026, buoyed by stronger performances by the manufacturing, electricity, capital goods, and consumer goods sectors, the latest government data shows.

While releasing the data, the Ministry of Statistics and Programme Implementation also said that it has further tweaked the new series of the Index of Industrial Production (IIP), which had first been released on June 1. The new series has an updated base year of 2022-23 and incorporates new data sources.  

It explained that it has decided to discontinue the use of the Wholesale Price Index in the measurement of some value-based outputs in the IIP and has instead adopted the Producer Price Index for the purpose. 

“Accordingly, the present release supersedes the earlier WPI based IIP 2022-23 series released on 1st June 2026,” the release said. “Users are advised to use the PPI-based IIP series presented in this release for all analytical, research, and policy purposes.”

According to Rahul Agrawal, principal economist at ICRA, this change has “led to material changes in growth across segments such as manufacturing and is also likely to lead to revisions in the GDP data”.

The manufacturing sector grew 5.5% in May 2026, down from 6.1% in April but faster than the 4.2% growth registered in May last year. 

“Manufacturing has grown by 5.5% which can be attributed to a revival in consumption — both [consumer] durables and non-durables have done well at 7.2% and 3.6% respectively,” Madan Sabnavis, chief economist at the Bank of Baroda said. “Within durables, the auto sector was once again the leader followed by computers and other electronic goods.”

The electricity and gas supply category saw growth quicken to a two-year high of 9.9% in May 2026, driven by a delayed monsoon and higher temperatures.    

The mining and quarrying sector contracted by 1.6% in May 2026, the fifth consecutive month of contraction.

Growth in the consumer durables sector quickened to a five-month high of 7.2%, while that of the consumer non-durables sector grew to 3.6%, also a five-month high.  

The government has, in recent months, implemented several long-overdue but welcome upgrades to India’s statistical databases. Wide-ranging, they cover the way the country measures Gross Domestic Product (GDP), industrial production, and price changes at the retail, wholesale, and producer levels. These updates have not only made India’s key economic statistics more representative of reality, but have also brought them in line with international best practices. The most basic change across all indices has been the updating of base years. Until recently, the base years for GDP, the Consumer Price Index (CPI), Wholesale Price Index (WPI), and Index of Industrial Production (IIP) were either 2011 or 2012. As such, these measures were significantly outdated and less reflective of reality with each passing year. In February, the Ministry of Statistics and Programme Implementation (MoSPI) released the new series of national accounts data, including GDP, with a base year of 2022-23. The new series incorporates methodological improvements and new data sources, making it more granular and robust. Some of these, such as the double-deflator approach, have long been demanded by statisticians and international bodies, including the IMF.

Similarly, MoSPI had in February also released the new series of the CPI with an updated base year of 2024, a more inclusive basket of items measured, and more accurate weightages. This has enabled a more realistic reading of retail inflation, a key metric in interest-rate decisions. In early June, MoSPI then released the new series of the IIP as well. The base year was updated to 2022-23 and the index’s data collection was strengthened. This, too, eventually feeds into more accurate GDP data. The other factor to be highlighted is that the data upgrades have not been limited to just MoSPI. The Ministry of Commerce and Industry also updated its WPI, releasing the new series on Monday. A more accurate WPI and CPI yield a more accurate GDP deflator, which strengthens the way that statisticians derive real GDP growth after having adjusted for inflation. The Commerce Ministry also released a new Producer Price Index (PPI), which is to replace the WPI in five years. A PPI is the standard among developed economies and provides more information about both goods and service price levels at the producer stage. With all these, the IMF is sure to improve the recurring ‘C’ grade it has given India’s national accounts data. These, it is hoped, will also be capped off by a time-bound release of the new Census with no further delays.

Earlier this week, the Ministry of Statistics and Programme Implementation released the latest Index of Industrial Production (IIP), a key barometer of India’s industrial health. The April 2026 print assumes added significance as it is the first release under the new 2022-23 base series and the second full month following the U.S.-Israeli war on Iran. Industrial output grew 4.9% year-on-year in April. While direct comparisons with earlier data should be treated with caution given the extensive revisions to the index’s basket, weights and methodology, the numbers suggest that India’s industrial fundamentals have remained relatively resilient despite disruptions to global oil and gas supply chains. A granular reading, however, reveals that this resilience is far from broad-based. Capital goods output expanded by a robust 16% year-on-year, reflecting the continuing effects of elevated public capital expenditure and infrastructure spending. By contrast, consumer durables output grew only 4.3%, while consumer non-durables expanded by a modest 2.8%, suggesting that rising fuel and energy costs may be exerting pressure on household consumption.

More significant than the headline growth number, however, is the extensive overhaul of the IIP itself. The revised series seeks to better reflect the structure of a rapidly changing economy. New products and sectors have been incorporated and several obsolete items dropped. A fourth major sector — water supply, sewerage and waste management — has been introduced with a weight of 2.02%. The electricity category has been expanded into Electricity and Gas Supply, with its weight rising to 10.87% from 7.99% earlier. Manufacturing remains the dominant component of the index, though its weight has declined marginally to 76.06% from 77.63%. More notable is the reduction in the weight of mining and quarrying to 11.05% from 14.37%. These shifts suggest that the importance of value-added infrastructure and utility services in gauging industrial activity has expanded, while the relative significance of primary resource extraction has diminished. Together, these changes better capture India’s emergence as a components and value-added manufacturing hub integrated into global supply chains. Most importantly, the government has indicated its intention to move towards a chain-linked framework with more frequent updates to sectoral weights. Such a system would allow official statistics to better keep pace with structural changes in the economy, making the IIP a more accurate and timely gauge of industrial health.

India’s relatively strong industrial performance in November 2025, especially driven by the manufacturing sector as it was, was more likely a flash in the pan than the start of a consistent trend. The Index of Industrial Production (IIP) grew 6.7% in November, the fastest growth rate in 25 months. Within this, the manufacturing sector grew 8%, which also was the fastest in 25 months. On the face of it, this would look remarkable and heartening, especially since October 2025 had seen growth slow to a 14-month low. However, this surge in growth was more likely due to seasonal and one-off factors. According to economists, the strongest push for growth came from sellers re-stocking their supplies following the festive season. The second factor is that the government timed the Goods and Services Tax (GST) rate reductions to coincide with the festive season. This temporary bump in demand would have further eroded stock levels, which then need to be replenished. In fact, the consumer durables and non-durables sectors saw growth in November rebounding to 10.3% and 7.3%, a 12-month and 25-month high, respectively. The third factor that seems to have worked in November is the bounce back of the mining sector following two months of contractions due to an unseasonably long monsoon. The mining sector saw growth come in at a reasonably strong 5.4% in November 2025. All of these are legitimate reasons for growth to pick up, but are not sustainable ones. The electricity and mining sectors will be bound by the vagaries of the weather. Overall consumer demand has been sluggish and industry players are talking of the GST-related boost already ebbing. And the festive season will not come back around until October-November 2026.

In fact, the IIP grew just 3.3% in the longer April-November period, the lowest for these eight months in any of the post-COVID-19 pandemic years. The consumer non-durables sector contracted 1% during this period, showing that the boost in November is not indicative. That the strong growth in November is more an anomaly than a sign of things to come should not come as a surprise. The Reserve Bank of India, earlier this month, predicted that growth in Q3 would slow to 7% from an average of 8% in the first two quarters. The fourth quarter is predicted to slow even further, to 6.5%. All of the previous headwinds still exist. The 50% tariffs by the U.S. are still in place, private investment remains sluggish, foreign capital is pulling out of the country, the weakening rupee is making imports more expensive for an import-dependent economy, real wages are not growing fast enough, and consumer demand remains tepid. Ironically, November’s positive industrial data bring into focus the headwinds the economy is really facing.

Industrial activity dipped marginally to a three-month low of 4% in September 2025. The data also shows that the growth in industrial activity during the first half of the financial year (April-September) was the slowest in at least five years.

Growth in the Index of Industrial Production, released by the Ministry of Statistics and Programme Implementation, stood at 3.2% in September of last year. However, growth had since accelerated to 4.3% by July 2025, following which it slowed again. 

The overall index grew 3% in the April-September 2025 period, the first half of the financial year 2025-26. This is the slowest in at least five years, the period for which data is readily available. 

The index grew 24% in the first half of 2021-22, owing to the low base of the previous pandemic-affected year 2020-21. In the first half of 2022-23, the index grew 7%, which slowed to 6.3% and 4.1% in the corresponding periods of 2023-24 and 2024-25, respectively.

In September, the slowdown in industrial growth was mainly led by the mining, primary goods, and consumer non-durables sectors. Activity in the mining sector contracted 0.45% in September 2025 from a growth of 6.6% in August 2025 and a growth of 0.2% in September of last year.

The consumer non-durables sector continued to contract for the second consecutive month in September 2025, by 2.9%, compared to a contraction of 6.4% in August 2025, and a growth of 2.2% in September last year.

According to Madan Sabnavis, chief economist at the Bank of Baroda, this could be due to the fact that the Goods and Services Tax (GST) rate cuts were implemented late in the month. 

“As the GST cuts have targeted this industry, it can be assumed that the real impact will be seen in October-November as dealers have been facing a challenge of selling products with the older price labels,” Mr. Sabnavis said.

On the other hand, the GST cuts could have been the factor that lifted activity in the consumer durables segment, he said. Growth in the sector surged to 10.2% in September 2025, from 3.5% in August 2025, and 6.3% in September last year.

“This pick up can be attributed to companies scaling up output in preparation for the festival season following the GST reforms,” Mr. Sabnavis said. “The same holds for vehicles.”

The primary goods sector saw growth slowing to 1.4% in September 2025 from 5.4% in the previous month, and 1.8% in September of last year.

Growth in the manufacturing sector accelerated to 4.8% in September 2025 from 3.8% in the previous month, and 4% in September 2024. 

Growth in industrial activity in India slowed to 4% in August 2025 from its 6-month high growth of 4.3% in July. Growth was dragged down by the consumer durables and non-durables sectors, as well as slower growth in manufacturing, capital goods, and infrastructure sectors, government data showed.

On the other hand, mining activity, the primary goods sector, and electricity output saw a positive turnaround.

Data on the Index of Industrial Production (IIP), released by the Ministry of Statistics and Programme Implementation on Monday (September 29, 2025), showed that growth in the index this August was considerably faster than the 0% growth seen in August last year.

“This data should be read with caution as it captures neither the tariff nor GST effect which have been in the news and affected sentiment in business,” Madan Sabnavis, Chief Economist at the Bank of Baroda said. “Tariffs were implemented from Aug 27th while GST benefits kicked in late September,” he added.

The mining and quarrying sector in particular saw a significant turnaround. It grew 6% in August 2025, a 14-month high, snapping a four-month streak of contractions.

The second sector to see a robust turnaround was the primary goods sector, which saw growth coming in at a seven-month high of 5.2%. The electricity sector grew at a five-month high of 4.1% in August 2025.

The manufacturing sector, however, slowed to 3.8% in August 2025, down from 6% in July. This was quicker than the 1.2% growth the sector saw in August last year.

Similarly, growth in the capital goods sector slowed in August 2025 to 4.4% from 6.7% in July 2025. This was, however, quicker than the 0% seen in August last year.

Growth in the infrastructure and construction goods sector remained in double digits, at 10.6%, although this was slower than the growth seen in July 2025 of 13.7%.

Consumer-focused sectors saw growth slowing. The growth in the consumer durables sector slowed to 3.5% in August 2025 from 7.3% in July and 5.4% in August last year. The consumer non-durables sector saw activity contracting 6.3%, the worst performance in eight months.

The GDP growth numbers released on Friday (August 29, 2025), showing that growth in Q1 of this financial year stood at 7.8%, came as a pleasant surprise at a time when most of the commentary has been about the factors holding growth back. For instance, even the Reserve Bank of India, as recently as August 6, 2025, had predicted that growth would be at 6.5% in Q1. It was off by a significant 1.3 percentage points less than a month before the data came out, something it must introspect about. Within the data, the strong manufacturing sector growth, of 7.7%, was especially heartening given that it came on a relatively high base of 7.6% in Q1 of last year. Some commentators have said that this is because companies were ramping up production and exports ahead of the August tariff deadline by the U.S. However, given that merchandise exports grew just 1.6% in Q1, the more likely reason is that companies were catering to domestic demand. However, the numbers released by the government do not provide much clarity here. The manufacturing sector, as measured by the Index of Industrial Production, grew at 3.3% in Q1, slower than the 4.3% seen in Q1 last year. Steel consumption was drastically slower in Q1 this year than last year. Both private and commercial vehicle sales actually contracted 5.4% and 0.6%, respectively, in Q1. Railway freight traffic grew by 2.5% versus 5% last year, while air freight grew at 5.4% compared to 13.9% last year. Two-wheeler vehicle sales contracted 6.2% while three-wheeler sales were flat at 0.1% growth. Diverse data show that the core and consumer sectors were slowing, and so the pickup in the manufacturing sector is worth a deep examination. The strong performance by the services sector is welcome, and shows how dependent the Indian economy is on this sector.

Chief Economic Adviser V. Anantha Nageswaran has said that the government was retaining its 6.3%-6.8% growth prediction for the year. This means that, with 7.8% in Q1, the government expects growth to significantly slow down in the remaining three quarters, despite its statements about the limited impact of the U.S. tariffs. The data also call into question the robustness of the statistical system, since a nominal GDP growth of 8.8% assumes that inflation was just 1% in Q1. Clearly, price levels are not being captured adequately. A relatively low nominal growth rate also makes it more challenging for the government to meet its fiscal deficit targets, especially at a time when it expects a revenue hit due to the upcoming GST rate cuts. Overall, the GDP numbers have brought cheer, but also several questions.