QUICK ESTIMATE OF INDEX OF INDUSTRIAL PRODUCTION AND USE-BASED INDEX FOR THE MONTH OF JANUARY 2026

The Ministry of Statistics and Programme Implementation (MoSPI) released the Quick Estimate of the Index of Industrial Production (IIP) for January 2026 on M...

GS Paper 3 (Indian Economy Industrial Policy Economic Indicators)

What Happened

The Ministry of Statistics and Programme Implementation (MoSPI) released the Quick Estimate of the Index of Industrial Production (IIP) for January 2026 on March 2, 2026
Overall IIP growth recorded 4.8% year-on-year in January 2026 — a three-month low signalling moderate industrial momentum
Sector-wise growth: Manufacturing 4.8%, Electricity 5.1%, Mining 4.3%
Use-based classification highlights:
Infrastructure/Construction Goods: +13.7% (highest growth)
Consumer Durables: +6.3%
Intermediate Goods: +6.0%
Primary Goods: +3.1%
Capital Goods: +4.3%
Consumer Non-Durables: −2.7% (only contracting segment)
Within Manufacturing, top growth sub-sectors: Basic Metals (13.2%), Motor Vehicles and Trailers (10.9%), Non-Metallic Mineral Products (9.9%)
14 out of 23 manufacturing industry groups recorded positive growth at NIC 2-digit level

Static Topic Bridges

Index of Industrial Production (IIP): Institutional Framework and Publication

The IIP is India's primary short-term indicator of industrial sector performance, compiled and published monthly by MoSPI through its National Statistical Office (NSO). The index measures volume changes in industrial output — not value — using a fixed base year. Data for 14 source ministries/departments is aggregated by MoSPI.

Published by: MoSPI (National Statistical Office) — under the Ministry of Statistics and Programme Implementation
Frequency: Monthly, released approximately 42 days after the reference month as a "Quick Estimate"
Base year: 2011-12 (current series, revised from 2004-05 series in 2017)
Previous base years: 1937, 1946, 1951, 1956, 1960, 1970, 1980-81, 1993-94, 2004-05 — revised periodically
Coverage: Mining (14.4% weight), Manufacturing (77.6% weight), Electricity (7.9% weight)
NIC (National Industrial Classification): Data compiled at NIC 2-digit level; 23 manufacturing groups, 2 mining groups, 1 electricity group
Source agencies: 14 Government of India Ministries/Departments/Organisations supply raw data to MoSPI

Connection to this news: MoSPI's March 2026 release of the January 2026 Quick Estimate follows the standard 42-day cycle. The base year 2011-12 forms the reference for calculating growth rates, and the NIC 2-digit level breakdown enables identification of specific sub-sector performance — the kind of granular data tested in UPSC Prelims MCQs.

Use-Based Classification: Reading Industrial Health

The use-based classification divides industrial output by end-use destination — how the produced goods will be used in the economy. This classification is arguably more policy-relevant than the sector-based classification because it links industrial output to investment, consumption, and trade dynamics.

Primary Goods: Raw materials and natural resources (crude oil, coal, basic metals) — January 2026: +3.1%; weight approximately 34% in IIP
Capital Goods: Machinery, equipment used for production — January 2026: +4.3%; signals investment sentiment; weight ~8%
Intermediate Goods: Semi-finished goods and components — January 2026: +6.0%; weight ~17%
Infrastructure/Construction Goods: Cement, steel, construction materials — January 2026: +13.7%; driven by government capex; weight ~12%
Consumer Durables: White goods, automobiles — January 2026: +6.3%; reflects urban demand; weight ~13%
Consumer Non-Durables: FMCG, food products — January 2026: −2.7% contraction; reflects rural demand stress or seasonal effects; weight ~15%
Index values (January 2026): Primary Goods 167.9, Capital Goods 124.4, Intermediate Goods 182.8, Infrastructure/Construction Goods 227.7, Consumer Durables 138.2, Consumer Non-Durables 160.7

Connection to this news: The Infrastructure/Construction Goods growth of 13.7% is a direct signal of sustained government capital expenditure — under National Infrastructure Pipeline (NIP) and PM Gati Shakti — flowing into construction activity. The Consumer Non-Durables contraction (−2.7%) indicates pressure in mass-consumption markets, potentially reflecting rural demand weakness or post-festival inventory drawdown.

Manufacturing Sector Structure and NIC Classification

India's manufacturing sector — representing 77.6% of the IIP — is classified under the National Industrial Classification (NIC) 2008, which follows the UN's International Standard Industrial Classification (ISIC). Understanding the NIC classification helps interpret which industrial sub-sectors are driving or dragging IIP growth.

NIC 2-digit level: 23 manufacturing industry groups tracked in IIP
Top January 2026 growth contributors: Basic Metals (13.2%), Motor Vehicles/Trailers (10.9%), Non-Metallic Mineral Products (9.9%)
Basic Metals sector: Includes steel, aluminium, copper — growth here reflects infrastructure construction demand
Motor Vehicles sector: Reflects automobile production recovery — consistent with strong auto sales data
Non-Metallic Mineral Products: Cement and glass — confirms construction/real estate sector activity
IIP manufacturing weight distribution: Large weights in Food Products, Textiles, Chemicals, Basic Metals, Fabricated Metal Products, and Motor Vehicles
Manufacturing sector value added as share of GDP: India's manufacturing GVA is approximately 17–18% of GDP — government aims to raise to 25% under Make in India

Connection to this news: The concentration of positive growth in Basic Metals and Construction Materials in January 2026 confirms that government-led infrastructure spending is the primary engine of industrial activity, while consumer-facing manufacturing (non-durables) underperforms — a pattern consistent with India's current growth narrative.

Key Facts & Data

IIP January 2026 overall growth: 4.8% YoY (three-month low)
Manufacturing sector: 4.8% | Mining: 4.3% | Electricity: 5.1%
Infrastructure/Construction Goods: +13.7% (highest use-based growth)
Consumer Non-Durables: −2.7% (only contraction)
Capital Goods: +4.3% | Consumer Durables: +6.3% | Intermediate Goods: +6.0% | Primary Goods: +3.1%
Manufacturing groups with positive growth: 14 out of 23 NIC 2-digit groups
Top manufacturing sub-sectors: Basic Metals (13.2%), Motor Vehicles (10.9%), Non-Metallic Minerals (9.9%)
Released by: MoSPI (National Statistical Office)
IIP base year: 2011-12
Sector weights: Manufacturing ~77.6%, Mining ~14.4%, Electricity ~7.9%
Publication lag: Approximately 42 days after reference month (Quick Estimate)
Index values: Capital Goods 124.4, Infrastructure/Construction Goods 227.7, Consumer Durables 138.2, Consumer Non-Durables 160.7