IIP — Index of Industrial Production

Tracks month-to-month change in the physical volume of output from mining, manufacturing and electricity — purely quantity produced, with no prices involved.

Explain it like I'm 10

Imagine literally counting how many units rolled off assembly lines this month, compared to the same month a year ago, across a representative sample of factories, mines and power plants — no rupee values, no prices, just physical quantity: tonnes of steel, units of cars, megawatt-hours of electricity. Combine that count across a fixed representative basket of industries into one number, and you get the Index of Industrial Production — a pure read on whether India is physically making more or less stuff than it was a year earlier.

The formula

IIP Growth (%) = (IIP this month − IIP same month last year)
                / IIP same month last year × 100

Annual IIP growth:
  FY23  = 5.2%
  FY24  = 5.8%
  FY25  = 4.0%
  FY26  = 4.1%

Historical data

IIP annual growth, FY23–FY26 (%)

A gentle deceleration from FY24's post-pandemic-recovery pace toward a steadier, if slower, 4% cruising speed — though within that trend, individual months have swung sharply, including a two-year-high 7.8% print in December 2025 that cooled to 4.8% by the following January.

Base year 2011-12 → 2022-23

India rebased IIP's reference year from 2011-12 to 2022-23 in 2026, alongside the broader wave of national-accounts rebasing that also touched GDP and CPI. As with any industrial index rebasing, the update reflects a representative basket of goods that has shifted substantially in fourteen years — newer product categories that barely existed in 2011-12 (certain electronics, EV components) now carry meaningful weight, while some older categories have shrunk in relative importance. As with GDP and CPI, IIP growth rates computed under the old and new base years aren't strictly comparable without an official back-series linking the two.

Who calculates it

The National Statistical Office (NSO), under MoSPI, releases IIP monthly, typically with a lag of roughly six weeks from the reference month.

Where this number can mislead you

⚠IIP covers only industry — mining, manufacturing and electricity — excluding services, which make up the majority of India's GDP, so it captures only part of overall economic momentum.
⚠The index tracks a fixed, representative basket of items from the base year; genuinely new industries or products that emerge after the base year are structurally under-represented until the next rebasing catches up.
⚠Month-to-month IIP figures are prone to "base effects" — an unusually low or high reading in the same month a year ago can mechanically inflate or deflate this year's percentage growth, independent of any real change in current momentum.
⚠Like GDP, IIP prints are provisional on first release and get revised as more complete data comes in, so an early month's figure isn't the final word on that month's industrial performance.

Reality check

IIP growth hit a two-year high of 7.8% in December 2025, before cooling sharply to 4.8% in January 2026 — a swing that, taken in isolation, might look alarming, but sits well within the range of normal month-to-month volatility around a steadier underlying trend that averaged roughly 4% for the full FY25-26 year.

Test yourself

Question 1 of 5Score: 0

What does the Index of Industrial Production (IIP) measure?