India’s industrial growth performance in August continued its strong streak since the beginning of the financial year, and sets the economy up well for the upcoming festive season. Growth in the Index of Industrial Production (IIP) quickened to 8% in August 2026, the second fastest that it has been since at least April 2024, which is the earliest month for which the new series of the IIP has growth data. The fastest growth in this period, of 8.8%, came as recently as June 2026. In fact, IIP growth in the April-August period of this financial year stood at a robust 6.8%, faster than that seen during the corresponding periods of the previous two years. The new series has an updated base year, more data sources, and improved methodology, so this growth performance is as accurate an indication of industrial growth as government data can provide. Moreover, apart from a few divergences, IIP data largely match the trends evident in the Index of Core Industries (ICI), the other government index that measures industrial performance. For example, the IIP shows that the electricity sector’s growth quickened to 12.3% in August 2026, while the ICI pegs it at 11.6%. Similarly, the construction goods sector saw growth come in at a relatively strong 6.4%, albeit slower than July’s 8%. In keeping with that, the ICI shows that the cement sector grew by a robust 12.5% in August, though this was slightly slower than the 12.7% in July. The older series of both indices often provided contrary indications, so this alignment is welcome.

The IIP for August also lays out some core strengths that seem to be developing in the economy. The manufacturing sector grew by nearly 9% in August, and averaged 7.6% in the April-August 2026 period. Given that it had grown by about 4.2% in the first five months of the previous financial year, this acceleration is good to see, especially since it comes at a time when producers are facing several input-related pressures. At the start of this calendar year, manufacturing growth seemed to have been driven by a growth in exports. The August data show that this is now being supplemented by a recovery in domestic consumption. The growth in consumer durables stood at 11.1% in August. The consumer non-durables sector returned to growth, of a little more than 2%, after having contracted in July. The effect of the Goods and Services Tax rate cuts in September 2025 should have petered out by now, so this boost in durables production likely means that producers are expecting a strong festive season ahead. The third quarter of the financial year will therefore be crucial for the economy, but the groundwork seems to be in place for a relatively good one.