India’s Factory Output Hits 8 Percent as Mining Shrinks

India’s factory output grew 8.0 percent in August 2026, the National Statistics Office said, as manufacturing and power offset a 5.6 percent mining drop. The Index of Industrial Production stood at 123.3 against 114.2 a year earlier, on a 2022-23 base of 100.

The same release raised July to 7.4 percent from a 6.7 percent quick estimate, so the year-on-year step-up is 0.6 percentage point, not 1.3. The August index also slipped from 125.6 in July. Several market desks had 6.5 percent on the sheet; the mix behind 8.0 percent is tighter than that beat implies.

Factory Output Hit 8 Percent After July Was Revised

The Ministry of Statistics and Programme Implementation published the quick estimates for August 2026 at 4:00pm on 28 September 2026. Manufacturing, 76.062 percent of the index, rose 9.0 percent. Electricity and gas supply rose 12.3 percent. Water supply, sewerage and waste management, the fourth sector on the new series, grew 6.3 percent. Mining and quarrying contracted 5.6 percent.

The National Statistics Office called three straight months of manufacturing growth at 8 percent or more a record for the series. June’s headline IIP was 8.8 percent. July’s final manufacturing reading is 8.2 percent. August’s 9.0 percent extends that run, and 18 of 23 manufacturing groups at NIC 2-digit level were higher than a year earlier.

April to August output is up 6.7 percent against 4.2 percent a year earlier. The August quick estimate was compiled at a weighted response rate of 88.0 percent; July’s final revision used 93.4 percent. The September index is due on 28 October 2026.

THE AUGUST PRINT

• Headline growth: IIP rose 8.0 percent year on year, with the index at 123.3 against 114.2 in August 2025.
• July revision: The final July reading is 7.4 percent (index 125.6), up from the 6.7 percent quick estimate.
• April to August: Cumulative growth is 6.7 percent, against 4.2 percent in the same stretch a year earlier.
• Sample depth: August used an 88.0 percent weighted response rate; July’s final used 93.4 percent.

A year earlier the index had grown 4.7 percent, with manufacturing at 3.6 percent, so part of August’s jump is arithmetic. The sequential dip from 125.6 to 123.3 is the part the year-on-year headline hides.

Why Mining Contracted 5.6 Percent in August

Mining is 11.053 percent of the new IIP, down from 14.372 percent on the 2011-12 series, and it still pulled the August print around. The mining index printed at 85.7, against 90.8 a year earlier and 94.4 in July, a 9.2 percent fall from the previous month. It is the only broad sector still below the 2022-23 base of 100.

August is the seasonal trough. In 2025-26 the mining index ran from 110.3 in April to 90.8 in August, then 125.4 in March. The 2026-27 path is the same shape at a lower level: 106.1 in April, 85.7 in August. Rains stop opencast work, and the year-ago comparison is harsh because mining had grown 15.8 percent in August 2025.

SECTOR INDICES IN AUGUST

Inside mining, fuel minerals (weight 5.647) fell 5.7 percent, with the index at 93.3 against 98.9. Non-metallic minerals including minor minerals (weight 3.411) fell 12.8 percent, to 67.7 from 77.6, the weakest sub-index on the page. Metallic minerals including rare earths (weight 1.995) rose 5.0 percent, to 94.8 from 90.3, and were not enough to offset the other two. April to August mining is down 2.0 percent.

The split matches the core-sector print a week earlier. Coal output in that index fell 3.8 percent in August after a 7.6 percent rise in July. Crude oil fell 3.6 percent and natural gas 4.9 percent. Iron ore still grew 5.5 percent, a sharp slowdown from 29.5 percent in July. Extraction is not following the factory boom.

Switchgear, Cars and Two-Wheelers Did the Lifting

Manufacturing’s 9.0 percent was not a blanket rise across all 23 groups. The National Statistics Office named three positive contributors: manufacture of electrical equipment at 30.9 percent, other transport equipment at 25.3 percent, and motor vehicles, trailers and semi-trailers at 25.2 percent.

Electrical equipment (weight 3.175) was led by switchgear, circuit breakers, control and meter panels, end-face connectors for optical fibres and cables, plus UPS units and solid-state drives. Motor vehicles (weight 6.417) drew on auto components, spares and accessories, passenger cars and commercial vehicles. Other transport equipment (weight 2.089) drew on two-wheelers, railway rolling stock and motorcycle parts.

Further down the table, rubber and plastics products rose 21.4 percent, computer, electronic and optical products 19.3 percent, beverages 18.3 percent, fabricated metal products 16.9 percent, textiles 13.1 percent, other non-metallic mineral products 11.4 percent, and machinery 10.3 percent. Food products, the fifth-heaviest manufacturing group at 5.679, grew only 2.8 percent. Basic metals, the heaviest at 9.198, grew 2.4 percent. Pharmaceuticals grew 1.6 percent.

FIVE GROUPS THAT CONTRACTED

• Tobacco products: Output fell 8.0 percent, the steepest decline among the 23 manufacturing groups.
• Wearing apparel: The group fell 7.4 percent in August and is down 5.6 percent for April to August.
• Coke and refined petroleum: A 7.721 weight group slipped 0.6 percent, in line with weak refinery runs.
• Chemicals and chemical products: The 7.813 weight group fell 0.5 percent, and is down 1.2 percent for April to August.
• Paper and paper products: Output was 0.1 percent lower than in August 2025.

The factory story in August is electrical gear, vehicles and two-wheelers, with rubber, electronics and cement-linked minerals behind them. Apparel, tobacco, chemicals and refining did not join it. April to August manufacturing is up 7.4 percent, which is firm, and still leaves those five groups on the other side of the line.

Capital Goods Grew 16.9 Percent as Non-Durables Lagged

Use-based classes show the same split. Capital goods rose 16.9 percent, with the index at 140.7, after 19.0 percent in July. Intermediate goods rose 13.7 percent. Consumer durables rose 11.1 percent. Infrastructure and construction goods rose 6.4 percent. Primary goods, where mining sits, rose 3.5 percent. Consumer non-durables rose 2.1 percent.

The office said intermediate goods, capital goods and consumer durables were the top three positive contributors to August IIP. Capital goods are 8.082 percent of the index and non-durables are 16.148 percent, so the slower class is the heavier one. April to August, capital goods are up 16.3 percent and non-durables 1.2 percent.

USE-BASED GROWTH IN AUGUST

Cars, two-wheelers, electronics and electrical machinery sit in durables and capital goods. Soap, packaged food and other household staples sit in non-durables, and that index is 114.3, barely above last August’s 112.0. Investment demand is doing the work that mass consumption is not. The month-wise IIP series in full is on the statistics office portal for anyone tracing that gap back through 2025-26.

What the New IIP Series Counts Now

August is the fifth monthly print on the series that replaced the 2011-12 index on 1 June 2026. The National Statistics Office shifted the base to 2022-23, added gas supply plus water, sewerage and waste management, and broke mining and electricity into sub-indices. The old index had three sectors. This one has four.

The basket now has 1,042 products mapped to 463 groups, against 839 items in 407 groups on the old series. Additions include magnetic-stripe cards, CCTV cameras, non-woven textiles, aircraft and spacecraft parts, stents and human vaccines. Kerosene, fluorescent tubes, CFLs, bicycle tyre tubes and sewing machines came out. Item groups measured in value terms rose to 234 from 109, and the deflator moved toward the output producer price index.

Weights moved with the basket, which is how the 2022-23 weights shifted toward utilities and away from extraction. Manufacturing went to 76.062 percent from 77.633 percent. Mining went to 11.053 percent from 14.372 percent. Electricity and gas supply went to 10.865 percent from 7.995 percent. Water, sewerage and waste management entered at 2.020 percent. Inside power, non-renewable generation carries 7.839 percent and renewables 2.332 percent, with gas supply at 0.694 percent.

That granularity is what lets the August print show a 15.4 percent rise in renewable generation, index 196.7 against 170.5, beside a 12.3 percent rise in non-renewable generation and a 2.4 percent fall in gas supply. Combined electricity and gas still printed 12.3 percent because generation swamped the gas decline. On the old three-sector index, that split would have been a single electricity number.

Cement and Power Rose While Coal and Crude Fell

The Office of the Economic Adviser had already shown the two-speed pattern on 21 September 2026, when it said core industries grew 4.8 percent in August, against a final 5.0 percent in July. Cement rose 12.5 percent, electricity 11.6 percent, iron ore 5.5 percent, steel 3.4 percent and refinery products 2.6 percent. Coal, natural gas, crude oil and fertilizers contracted.

CORE INDUSTRIES IN AUGUST

• The gainers: Cement 12.5 percent, electricity 11.6 percent, iron ore 5.5 percent, steel 3.4 percent, refinery products 2.6 percent.
• The decliners: Coal -3.8 percent, crude oil -3.6 percent, natural gas -4.9 percent, fertilizers -12.4 percent.
• The fiscal stretch: April to August core growth is 4.3 percent, against 2.4 percent a year earlier.

Fertilizer has been shrinking for months after feedstock trouble tied to the West Asia supply shock. Coal’s swing from plus 7.6 percent in July to minus 3.8 percent in August is the monsoon plus a less helpful base. ICRA principal economist Rahul Agrawal had already told clients that coal and iron ore together took about 130 basis points off the core headline between those two months. The IIP mining print a week later is that warning in a broader index.

Power demand is the other side of the same month. The IIP electricity index, 10.171 percent of the whole, rose 13.3 percent. Combined electricity and gas supply rose 12.3 percent. Factories and households drew more current while the mines that usually feed thermal plants had a poor month. Pithead stocks can cover that for a while. They do not rewrite the mining index.

Last Year’s GST Destocking Softened the Year-Ago Base

Rahul Agrawal, principal economist at ICRA, said August 2025 output was held down by inventory recalibration ahead of GST rate cuts that the GST Council announced in early September 2025 and that took effect on 22 September 2025. Factories that ran light a year ago make this August’s 8.0 percent easier to print. Manufacturing’s jump from 3.6 percent a year earlier to 9.0 percent sits on that base as well as on switchgear and vehicles.

In August 2026, Index of Industrial Production recorded an 8.0% year-on-year growth, supported by 9.0% growth in Manufacturing sector and strong growth of 12.3% in Electricity & Gas Supply sector.

National Statistics Office, IIP quick estimate, Press Information Bureau, 28 September 2026

That sentence is true and incomplete. Mining at 85.7, non-durables at 2.1 percent, a sequential fall from 125.6 to 123.3, and a year-ago factory base dented by GST destocking are also on the same page. The next test is whether manufacturing stays at 8 percent or more once the monsoon lifts mining and the GST base rolls off. September’s index, due on 28 October 2026, is the first reading that starts to answer that.