India’s industrial production grows 5.2% in February

The latest reading reflects a fragile, uneven rebound in industrial activity amid soft domestic demand, global uncertainty, and sector-specific challenges.

India’s industrial production growth accelerated to 5.2% year-on-year in February, led by a robust expansion in manufacturing and supported by moderate growth in mining and electricity, according to provisional data released by the ministry of statistics and programme implementation (MoSPI) on Monday.

The latest print was higher than the 2.7% growth recorded in February 2025 and also improved from the 5.1% expansion a month ago, as per revised estimates, indicating a gradual strengthening in industrial activity. The index of industrial production (IIP) stood at 159.0 in February 2026, compared with 151.1 a year ago, reflecting an overall improvement in output levels.

Manufacturing, which accounts for the largest share of 77.63% in the IIP, grew 6.0% year-on-year in February, accelerating from 5.3% in January and significantly higher than 2.8% in the year-ago month, providing the main impetus to overall growth.

The expansion was relatively broad-based, with 14 of 23 industry groups within manufacturing recording positive growth. Key contributors included basic metals (13.2%), motor vehicles, trailers and semi-trailers (14.9%), and machinery and equipment (10.2%), supported by higher production of steel products, auto components, commercial vehicles and industrial machinery.

Mining output rose 3.1% year-on-year in February, moderating from 4.3% growth in January but improving from 1.6% growth in February 2025, indicating steady extraction activity. Electricity generation increased 2.3% during the month, slowing from 5.1% growth in January and below 3.6% in the year-ago period, pointing to some moderation in power demand.

Use-based classification data showed a mixed but largely positive trend, with capital goods output rising sharply by 12.5%, signalling improving investment activity, while infrastructure and construction goods grew 11.2%, intermediate goods expanded 7.7%, and consumer durables increased 7.3%.

In contrast, primary goods posted a modest 1.8% growth, and consumer non-durables contracted 0.6%, reflecting some weakness in mass consumption demand. Overall, infrastructure goods, intermediate goods and capital goods emerged as the key drivers of industrial growth during the month.

The February data suggest a gradual but uneven recovery in industrial activity, with manufacturing and investment-linked sectors gaining traction even as consumption trends remain mixed. The estimates are based on a weighted response rate of 88.64% and are subject to revision as more data becomes available.

“IIP growth accelerated to 5.2% in February 2026 from the upward revised 5.1% in January 2026, aided by a favourable base, while exceeding Icra forecast (4.0%) for the month,” Aditi Nayar, chief economist, Icra Ltd. “The slight sequential uptick in the IIP growth in February 2026 belied the halving seen in the core sector expansion. The uptick was driven by the manufacturing sector, which expanded by a healthy 6.0% in February 2026, even as the electricity and mining sectors witnessed a deceleration in their y-o-y growth rates.”

Nayar further added that four of the six use-based segments saw an improvement in their y-o-y performance in February 2026 vis-à-vis January 2026, barring primary goods and infrastructure/construction goods, with the former reflecting the weaker performance in the mining and electricity sectors. Notably, the latter witnessed a double-digit growth for the fourth consecutive month, suggesting that construction activity has remained quite robust,” She added.

Gaura Sen Gupta, chief economist at IDFC First Bank, said the February IIP numbers show that growth momentum was strong before the West Asia crisis hit.

“This is also confirmed by other indicators such as freight movement and consumption indicator for both Urban and Rural . The impact of West Asia crisis will be felt more in March but the IIP print may not be that weak as domestic energy production has been ramped up. Moreover, supply side disruptions remain concentrated in a few industries,” she said.

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