Quote on IIP by Aditi Nayar, Chief Economist, ICRA Ltd
Below the Quote on IIP by Aditi Nayar, Chief Economist, ICRA Ltd
IIP growth expectedly moderated to 6.7% in September 2026 from the downward revised 7.8% in August 2026, while printing in line with ICRA’s estimate for the month (+6.7%). The deceleration was broad-based, with all the four sectors recording a deterioration in their YoY performance between these months. With IIP growth accelerating to a robust 7.3% in Q2 FY2027 from 6.2% in Q1 FY2027, complimenting the strength visible across high frequency indicators, we anticipate GDP growth to exceed 7.0%, in Q2 FY2027, while moderating somewhat compared to the stronger-than-expected 7.8% seen in Q1.
While the growth in manufacturing output eased to 7.6% in September 2026 from 8.6% in August 2026, partly on account of an unfavourable base, it remained quite healthy. As many as eight of the 23 manufacturing sub-segments, with a weight of 22.2% in the IIP, recorded a double-digit expansion in September 2026.
Mining output contracted by a steep 6.2% in September 2026, led by the non-metallic minerals segment; output has contracted in eight of the last nine months. Utilities output expanded by double-digits for the second consecutive month in September 2026, led by the electricity segment, as strong demand amid sub-par rains supported power generation.
As many as five of the six use-based segments, barring consumer non-durables, witnessed a moderation in their YoY growth in September 2026 vis-à-vis August 2026. Notably, the output of capital goods and intermediate goods reported double-digit growth for the sixth and fifth consecutive months, respectively.
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