India’s Industrial Growth Slows to 6.7% in July as Mining Contracts

New Delhi, August 28, 2026: India’s industrial production growth moderated to 6.7% year-on-year in July 2026, mainly due to a contraction in mining activity and slower growth in manufacturing and electricity generation, according to government data released on Friday.

The July Index of Industrial Production (IIP) growth was below the revised 8.8% recorded in June, although it remained stronger than economists’ expectations of around 6%.

Mining Sector Turns Negative

Mining and quarrying emerged as the biggest drag on overall industrial growth. The sector contracted 0.9% in July, compared with revised growth of 1.6% in June and 10.7% growth a year earlier.

The slowdown comes amid continuing challenges in mining and raw-material supply, particularly during the monsoon season.

Manufacturing Continues to Grow

Manufacturing remained the main engine of industrial activity, expanding 7.3% in July, although this was slower than the revised 9.5% growth in June.

Out of 23 manufacturing industry groups, 19 recorded positive growth during July.

The strongest performers included:

Electrical equipment: 28.3%
Motor vehicles, trailers and semi-trailers: 22.2%
Machinery and equipment: 12.1%

Strong production of automobiles, auto components, electrical equipment and machinery helped offset weakness in mining.

Electricity Output Also Slows

Electricity generation increased 8.7% year-on-year in July, compared with 11.3% growth in June.

Water supply, sewerage and waste-management activity grew 7.4% during the month.

Despite the moderation, all three sectors outside mining continued to record positive annual growth.

Capital Goods Lead Growth

The use-based classification of industrial output showed particularly strong momentum in capital goods.

Capital goods output rose 16.1% in July, followed by:

Intermediate goods: 10.0%
Consumer durables: 10.5%
Infrastructure and construction goods: 6.9%
Primary goods: 4.1%

However, consumer non-durables contracted 1%, indicating some weakness in demand for everyday consumption products.

April-July Industrial Growth at 6.3%

Despite July's moderation, industrial production has performed better during the first four months of the financial year.

For April-July 2026, overall IIP growth stood at 6.3%, compared with 4% during the corresponding period a year earlier.

This suggests that the broader industrial expansion remains stronger than last year, even though monthly momentum has softened.

IIP Index Remains Above Last Year

The quick estimate for the July IIP stood at 124.8, compared with 117.0 in July 2025.

The index was broadly unchanged on a month-to-month basis in July, according to the latest data.

New IIP Series

The July figures are part of the government's new IIP series. India changed the methodology for calculating factory output earlier this year, shifting from wholesale prices to producer prices for the industrial output calculation.

The government has also cautioned that the latest IIP numbers are quick estimates and may be revised as more information becomes available.

What the Numbers Mean for the Economy

The July data presents a mixed picture for India's industrial sector.

On one hand, strong growth in capital goods, automobiles, electrical equipment and machinery indicates continued investment and manufacturing momentum.

On the other hand, the contraction in mining and weakness in consumer non-durables suggest that some areas of the economy are facing pressure.

The key question for the coming months will be whether manufacturing can maintain its momentum while mining activity recovers.

Key Highlights
India’s July industrial output grew 6.7% year-on-year.
June growth was revised upward to 8.8%.
Mining and quarrying contracted 0.9%.
Manufacturing grew 7.3%.
Electricity generation increased 8.7%.
Capital goods recorded the strongest use-based growth at 16.1%.
Consumer durables grew 10.5%.
Consumer non-durables declined 1%.
April-July industrial output growth stood at 6.3%.
Conclusion

India’s 6.7% industrial growth in July shows that the manufacturing economy continues to expand, but at a slower pace than the revised June figure.

The contraction in mining was the biggest drag, while strong performance in automobiles, electrical equipment, machinery and capital goods provided support.

With industrial output still growing faster in the April-July period than a year earlier, the latest numbers suggest moderation rather than a broad-based industrial slowdown.

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