Here’s what the new IIP series shows about FY27 factory output

The new series of the Index of Industrial Production with a base year of 2022-23 released on Monday reported factory output at 4.9% in April 2026 from 3.2% in March 2026, belying the impact of the West Asia crisis on domestic growth engines.

This was the second highest growth registered by the IIP since December 2025, barring a 5.3% expansion recorded in February 2026. In April 2026, three of the four sub-segments, barring mining and quarrying, recorded growth. The manufacturing sector grew 6.2%, electricity and gas supply by 4.9%, and waste supply, sewerage and waste management by 6.6%. However, mining & quarrying contracted by 5.1%.

The impact of the West Asia crisis seemed visible in gas supply, which registered a contraction of 11.2% in the month.

Addressing reporters on the launch of the new IIP series, Saurabh Garg, Secretary, Ministry of Statistics and Programme Implementation, said the new series has completed the exercise of the updating of the troika of macroeconomic indicators including GDP and consumer price index-based inflation, with a common base year of 2022-23.

The data from the consumer side from the CPI and on the production side from IIP reflect the growth in the Indian economy, he further said. “Both baskets show growth of the economy, value addition through change in weights in the IIP such as the lower weight of basic metals in the new IIP and greater weight to plastics and rubber and automobiles and trucks,” he noted.

The new IIP has also tried to fill in the data gaps from the previous series and has brought data on gas distribution and minor minerals, he noted.

Analysts welcomed the new series IIP, noting that it has an expanded basket and coverage of items. “Interestingly, as per this, industrial output expanded at a relatively higher pace in FY24 and FY25 than previously estimated, with the manufacturing sector in particular reporting much higher growth rates in both these years. This could lead to some upward revision in the GDP estimates for these years, when the revised data for the same is released later this week,” said Aditi Nayar, Chief Economist, ICRA.

While FY27 started with strong factory output, the picture going ahead may be more cautious due to the West Asia crisis.  Megha Arora, Director, India Ratings and Research, said that notwithstanding higher crude prices and its pass-through to consumers from mid-May 2026, the agency expects IIP growth to improve to 5.5% in May 2026 as base effect will help in maintaining the growth momentum.

“Government’s continued capex is likely to keep capital goods and infrastructure/construction goods growth momentum in FY27 as well, while electricity generation is expected to further accelerate in May 2026 due to increased demand amidst high summer temperatures,” she said.

New data sources

To give better data on the country’s service sector that contributes about 55% to the GDP, MOSPI is set to soon come out with an index of services production, Garg further said, adding that a discussion paper was also issued recently.

The National Statistics Office is also carrying out an Annual Survey of Incorporated Services Sector Enterprises (ASISSE) to comprehensively cover the incorporated service sector of the economy.

Meanwhile, the Department for Promotion of Industry and Internal Trade (DPIIT) is set to come out with the revised base year of the Wholesale Price Index (WPI) and also launch the Producer Price Index (PPI) on Tuesday.

The base year of WPI will be revised to 2022-23 from the current 2011-12. The PPI measures prices from the point of view of producers and manufacturers of goods and services to assess prices at various stages of production.