India’s Industrial Output Grows 7.3% in June, Textile Manufacturing Rises 13.7%
Manufacturing drives industrial growth as 19 of 23 sectors expand; capital goods output rises 14.2% in Q1 FY27 despite global uncertainties.
India’s industrial output expanded by 7.3% YoY in June, improving from 5% recorded in the previous month, according to the latest data. The growth was supported by stronger performance across most sectors, with the exception of mining and quarrying.
The manufacturing sector registered a 7.8% YoY increase in June, up from 5.2% in May. Meanwhile, the mining sector grew by 1% YoY, recovering from the 1.4% contraction reported in the preceding month.
Among the manufacturing industries, 19 out of 23 sub-sectors recorded output growth during June. The strongest performers included:
- Electrical equipment: 34%
- Motor vehicles, trailers and semi-trailers: 17.5%
- Textiles: 13.7%
- Other non-metallic mineral products: 12.9%
- Food products: 10.8%
Based on the use-based classification, capital goods recorded the highest growth at 14.2% YoY, followed by:
- Intermediate goods: 9.3%
- Consumer durables: 7.7%
- Infrastructure/construction goods: 7.5%
- Primary goods: 4.9%
Q1 FY27 Industrial Performance
For the first quarter of FY27, the Index of Industrial Production (IIP) increased by 5.8% YoY.
Within manufacturing, electrical equipment and motor vehicles (including trailers and semi-trailers) registered notable growth of 25.8% and 15%, respectively.
The report noted that the 1.8% contraction in coke and refined petroleum products was likely influenced by measures introduced to limit petroleum product exports.
From the use-based perspective, capital goods output expanded by 14% during Q1 FY27, indicating continued investment activity despite an uncertain global environment.
Growth in consumer durables improved to 7.1% in Q1 FY27, compared with 2.8% in Q1 FY26, reflecting the continuing impact of GST rate rationalisation, particularly in automobile-related segments. However, consumer non-durables continued to record modest growth.
Outlook
The report indicates that industrial activity may continue to face challenges from an uncertain global environment and elevated input costs.
India’s external demand showed resilience during Q1 FY27, with an improvement in goods exports. On the domestic front, sustaining demand amid a deficit monsoon and rising inflation remains an important factor.
The rainfall deficit narrowed significantly from 40% at the end of June to 15.8% as of July 28, 2026, although rainfall remains below normal. While it is still early to assess the full impact of the monsoon on rural demand, the recent improvement in kharif sowing is considered a positive development.
Overall, India’s industrial sector is expected to continue navigating external uncertainties alongside evolving domestic economic conditions.