IIP growth quickens marginally to 5.2% in February 2026 on stronger manufacturing, capital goods performance

Growth in industrial activity in February 2026 accelerated marginally to 5.2%, driven by a quickening of growth in the manufacturing and capital goods sectors, data released by the government shows.

The data on the Index of Industrial Production for February 2026, released by the Ministry of Statistics and Programme Implementation on Monday, shows that the final growth for January was also upgraded to 5.1% from the provisional 4.8% stated as part of last month’s data release.

Within the Index, growth in the manufacturing sector accelerated to 6% in February 2026, from 5.3% in the previous month. This was also considerably faster than the 2.8% in growth in February last year. 

“The growth is investment led, with basic metals, automobiles, machinery, and double digit gains in capital goods and infrastructure/construction goods pointing to a capex and infrastructure driven upcycle,” Rajeev Sharan, Head of Research at Brickwork Ratings said.

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The mining and quarrying sector, on the other hand, saw growth slowing to a four-month low of 3.1% in February 2026, down from 4.3% in January. This was, however, faster than the 1.6% seen in February 2025. 

Growth in the electricity sector, too, slowed to 2.3% in February 2026 from 5.1% in January.  

Notably, growth in the capital goods sector accelerated to a nine-month high of 12.5% in February 2026 from 4.1% in the previous month. This performance on the back of a relatively strong performance of 8.1% in February of last year. 

Consumer demand, however, seems to have slumped, according to the data. The consumer durables sector contracted 2.1% in February 2026, the sector’s worst performance in 27 months. The consumer non-durables sector, too, contracted 0.6%, the second consecutive month of contraction.   

“Overall, the data confirms that investment linked sectors are anchoring growth, while softer consumer non durables and modest mining and electricity gains highlight areas where the recovery is still incomplete,” Mr. Sharan said. “From a credit rating perspective, sustained manufacturing and investment momentum support credit strength, though uneven demand means fundamentals are still evolving.”

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