MoSPI has replaced WPI with Output PPI as the deflator for the new IIP series, making industrial output estimates more accurate and aligned with global practices.
Highlights
- India’s IIP grew 5.1% in May 2026 compared to May 2025.
- MoSPI has adopted Output PPI instead of WPI for the new 2022–23 base series.
- Manufacturing grew 5.5%, while electricity and gas supply rose 9.9%.
- Capital goods posted strong growth of 12.9%, indicating investment momentum.
- The revised PPI-based IIP series will now be used for policy, research and analysis.
The Ministry of Statistics and Programme Implementation has revised India’s new Index of Industrial Production series by adopting the Output Producer Price Index as the deflator, replacing the Wholesale Price Index.
The earlier IIP series with base year 2022–23 was released on June 1, 2026, using WPI as the deflator. However, after the Department for Promotion of Industry and Internal Trade released the Output PPI series on June 15, MoSPI examined its use and decided to adopt it for the new IIP series.
The change is important because a significant part of industrial production in the IIP basket is reported in value terms. Out of 463 item groups, 234 are compiled using value-based production data and carry 36.02 percent weight. Using Output PPI is expected to provide a more accurate estimate of real industrial output because it captures producer-level prices in a more detailed manner.
MoSPI said the move is also in line with international best practices and the recommendation of the Technical Advisory Committee on IIP base revision. Since such major changes can be made only during base year revision, the ministry has now discontinued WPI for the new IIP series.
For May 2026, India’s IIP growth stood at 5.1 percent compared to May 2025. The overall IIP index was 122.7, against 116.7 in the same month last year.
Among major sectors, manufacturing grew 5.5 percent, electricity and gas supply rose 9.9 percent, and water supply, sewerage and waste management increased 5.5 percent. Mining and quarrying, however, declined 1.6 percent.
Within manufacturing, 16 out of 23 industry groups recorded positive growth. The top contributors were motor vehicles, trailers and semi-trailers, electrical equipment and basic metals. Motor vehicles grew 14.5 percent, supported by passenger cars, auto components and commercial vehicles. Electrical equipment grew sharply by 20.8 percent.
Use-based data showed strong growth in capital goods at 12.9 percent, followed by consumer durables at 7.2 percent, infrastructure and construction goods at 5.9 percent and intermediate goods at 5.8 percent.
MoSPI said the earlier WPI-based IIP series released on June 1 now stands superseded. Users have been advised to rely on the PPI-based IIP series for all analytical, research and policy purposes.
