India Manufacturing Production Slows to 7.6% in September 2026: What the IIP Miss Means for the Rupee and Nifty
India manufacturing production rose 7.6% year on year in September 2026, down from a revised 8.6% in August. The Ministry of Statistics and Programme Implementation (MOSPI) published the quick estimate on 28 October 2026 at 16:00 IST (10:30 UTC), as reported by Business Today. The headline Index of Industrial Production (IIP) grew 6.7%. Economists polled by Reuters had expected 7.3%, according to Lapaas Voice.
Factory output still grew faster than the headline index. The miss came mostly from mining, which shrank 6.2%. The release landed after the Indian cash market closed. Oil prices drove the day's moves in the Nifty 50, along with IT stocks. The rupee stayed near 95.3 per US dollar.
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
Table of Contents
- India Manufacturing Production September 2026: The Key Numbers
- What Is the Index of Industrial Production in India?
- Monthly Trend: India Factory Output Since April 2026
- Inside the September Data
- Why Did India Industrial Production Slow in September?
- How the Release Compared With Forecasts
- The Macro Backdrop: Oil Prices and the RBI
- Market Reaction on 28 October 2026
- Five-Year Context
- Technical Levels Traders Often Watch
- India Manufacturing Production Outlook
- India Economic Calendar November 2026
- Trading Around IIP Data: What Traders Often Watch
- Key Takeaways
- Frequently Asked Questions
This article explains the September data in detail. It covers the drivers and the five-year context. It then turns to forecasts and the dates traders often watch next.
India Manufacturing Production September 2026: The Key Numbers
The table below sets out the main figures from the IIP quick estimates, as published by Trading Economics and others. All growth rates compare September 2026 with September 2025.
Source: Trading Economics, Revoi, Asianet Newsable. Data released 28 October 2026. Past performance is not a reliable indicator of future results. Forecasts are not a reliable indicator of future performance.
The main points are short.
- Manufacturing growth eased from its August high of 8.6%.
- Headline IIP missed the Reuters consensus by 0.6 percentage points.
- Mining fell for a third straight month.
- Electricity output stayed strong at 11.2%.
- Seventeen of the 23 manufacturing groups grew in September.
The rupee is one market gauge that many analysts use for India's macro story. The chart below shows USD/INR.
What Is the Index of Industrial Production in India?
India's Index of Industrial Production measures the volume of industrial output each month. It covers factories and mines. It also covers utilities such as power. MOSPI publishes it about four weeks after the month ends. Manufacturing is by far the largest part of the index.
The IIP New Series With Base Year 2022-23
The IIP new series started with the April 2026 data. It replaced the old 2011-12 base and added a water supply and waste sector. The IIP weights changed as a result, according to The Hindu via SuperKalam.
Source: SuperKalam / The Hindu, 4 June 2026.
Growth rates calculated on the IIP base year 2022-23 are not strictly comparable with older figures. The first release of the new series is on the Press Information Bureau website.
Quick Estimates Are Often Revised
Each first print is a quick estimate. September's figure used a weighted response rate of 86.5%, according to Revoi, so later revisions are likely. Recent months show how large these changes can be.
Source: PIB / MOSPI June 2026 release, Deccan Chronicle, Business Today, Lapaas Voice. Past performance is not a reliable indicator of future results.
Monthly Trend: India Factory Output Since April 2026
The new series now has six months of data. India factory output generally picked up from April to August. September marks the first clear step down in manufacturing.
Source: PIB (April), The Tribune (May), PIB (June), SteelOrbis (July), Lapaas Voice (August, September). Past performance is not a reliable indicator of future results.
April to September: Fiscal Year to Date
India's fiscal year runs from April to March. The first six months of FY2026-27 show solid growth.
Source: Revoi, citing MOSPI quick estimates. Past performance is not a reliable indicator of future results.
Inside the September Data
Sector Breakdown
Manufacturing did most of the work. Electricity added support. Mining pulled the headline down.
Source: Lapaas Voice, Revoi. Past performance is not a reliable indicator of future results.
Manufacturing Winners and Losers
Growth was uneven across industries. Beverages and electrical equipment led. Pharmaceuticals and wood products fell.
Source: Revoi, Lapaas Voice. Past performance is not a reliable indicator of future results.
Switchgear and circuit breakers lifted electrical equipment, as Revoi reports. Auto components and passenger cars supported the vehicle group. Trading Economics notes that motor vehicle growth still eased from 25.2% in August, as its India industrial production page shows.
Use-Based Classification
The use-based view groups goods by how they are used. It shows where demand is strong.
Source: Revoi, citing MOSPI. Past performance is not a reliable indicator of future results.
Intermediate goods and primary goods were among the largest positive contributors. Capital goods also added strongly, according to Revoi. Consumer non-durables were the weakest group. This may point to softer demand for everyday goods, although output data do not measure spending directly.
Why Did India Industrial Production Slow in September?
Four forces explain most of the slowdown. Each one matters for the months ahead.
Why Did Mining Output Fall in India?
Mining fell 6.2% against a tough comparison. In September 2025 mining had grown 15.7%, according to Lapaas Voice. A high base makes year-on-year growth harder to achieve.
Coal does not explain the fall. India's coal output rose 10.5% to 75.37 million tonnes in September, reports Mysteel. Iron ore output also grew 18.4% in the core sector data from Business Today. This suggests the weakness may sit in other parts of the wider minerals basket. MOSPI has not given an official breakdown.
GST 2.0 Base Effects
India's GST rate cuts took effect on 22 September 2025, as Motor India notes. Many buyers waited for them. Sales then jumped after the change, which distorts this year's comparisons.
Source: Motor India, citing FADA. Past performance is not a reliable indicator of future results.
FADA president Sai Giridhar called the September figure "the most base-distorted print of the year", as quoted by Motor India. He put underlying growth at about 17% for the first five months of FY27. October brings a high festive base from 2025.
Capital Goods Cooled
Capital goods grew 10.4% in September. That is still growth above 10%. It is slower than August, as Lapaas Voice notes. Electrical equipment output rose 33.9%.
Weak Monsoon Weighs on Rural Demand
The 2026 monsoon ended 12.6% below normal, the weakest since 2015, according to DSIJ. Weak rain hurts farm incomes. Consumer non-durables grew only 1.4%. Fertiliser output fell 11.7% in the core sector data, according to Business Today.
How the Release Compared With Forecasts
The headline came in below most estimates. The Trading Economics consensus of 7.2% was the closest.
Source: Lapaas Voice, Trading Economics, Asianet Newsable. Forecasts are not a reliable indicator of future performance.
Manufacturing beat the Union Bank of India estimate. It fell short of the Trading Economics model. The spread of forecasts shows how hard this series is to predict.
The Macro Backdrop: Oil Prices and the RBI
Brent Crude Above $115
Oil is India's biggest external pressure. Brent traded at $115.20 per barrel on 28 October, up 79.11% from a year earlier, according to Trading Economics (around 14:00 UTC). Brent futures had settled at $116.72 on 23 October after Houthi attacks in Saudi Arabia, as GV Wire reported.
Market expert Ajay Bagga estimated the cost of each $10 rise in oil in March 2026. He told ANI it can widen India's current account deficit by about 0.4% to 0.5% of GDP. It can also add 30 to 40 basis points to consumer inflation, as reported by The Statesman. Our analysis of Brent crude above $110 looks at the oil side in more detail.
Inflation and the Repo Rate
Higher oil and food prices have pushed inflation up. The Reserve Bank of India responded in October.
Source: links in the table (Sahi, Business Today, Free Press Journal, Trading Economics). Past performance is not a reliable indicator of future results. RBI projections are forecasts and are not a reliable indicator of future performance.
The RBI raised the repo rate by 25 basis points to 5.50% on 7 October. The decision was unanimous, and the stance shifted to "calibrated tightening", reports Free Press Journal. Governor Sanjay Malhotra said a cut was off the table for now. He named a hike or a pause as the options ahead, according to Business Today.
Market pricing pointed to further tightening at the time. Swap markets priced about 100 basis points of hikes over 12 months before the decision, as Khaleej Times reported. Higher borrowing costs tend to weigh on durables and credit-funded investment with a lag.
Factory growth of 7.6% is above the 5.9% average since 2006 reported by Trading Economics. The sources above flag oil near $115 and rising rates as key risks for the coming months. A high festive base adds to the challenge.
Capital Flows and the Rupee
Foreign investors have been selling Indian shares. FPI outflows from Indian equities in 2026 reached ₹3.12 lakh crore, compared with ₹1.66 lakh crore in all of 2025, says Swarajya. October alone saw ₹52,100 crore leave by mid-month.
India's reserves fell by about $5 billion to $721 billion in the week to 16 October. Chronicle India cites RBI weekly data. Our USD/INR and RBI rupee analysis covers the central bank's role.
Market Reaction on 28 October 2026
The IIP came out at 16:00 IST, after the 15:30 IST equity close. Indian stocks therefore reacted to oil and IT shares during the session.
Source: Upstox, Trading Economics. Past performance is not a reliable indicator of future results.
Shares of Larsen & Toubro rose 3.7%. Nifty Auto gained 1.6%. Reliance fell 3.1%. Investors also waited for the US Federal Reserve decision due at 14:00 ET, reports Upstox.
Why the Data Barely Moved Indian Markets
IIP data arrives with a long lag. Markets often treat it as a check on trends seen earlier in PMI and core sector figures. September's PMI and core sector data were already public. A small miss of this kind has often had a limited direct effect on prices.
Five-Year Context
A five-year view helps put the latest figures in context. The tables below give that context for the IIP and for the markets discussed above.
IIP Growth by Fiscal Year
Source: Free Press Journal (FY22 to FY25), FocusEconomics (FY26), Revoi (FY27 to date). Past performance is not a reliable indicator of future results.
Nifty 50 by Calendar Year
Source: Wikipedia, citing NSE data (2021 to 2025), Upstox (2026). Price index only, before taxes and costs, which may vary. Past performance is not a reliable indicator of future results.
The Nifty 50 peaked at 26,373 on 5 January 2026. It then fell to 22,183 on 2 April amid tensions in West Asia, according to 5paisa. The 28 October close sits about 13.9% below that peak.
USD/INR Year-End Rates
Source: FRED, St. Louis Fed (2021 to 2023, end of period), Siasat / PTI (2024 and 2025 closes), Trading Economics (2026). Methods differ slightly between sources. Past performance is not a reliable indicator of future results.
Brent Crude Annual Average Price
Source: FRED, St. Louis Fed, citing US Energy Information Administration data (annual averages), Trading Economics (2026). Past performance is not a reliable indicator of future results.
Technical Levels Traders Often Watch
The IIP has its own chart only in the form of monthly data. Traders usually express views through related markets. These levels come from published technical notes and may change quickly.
Nifty 50 Support and Resistance
Source: 5paisa trade setup, 5paisa trade setup, 23 October, 5paisa. Past performance is not a reliable indicator of future results.
The index trades below its key daily moving averages, says the 5paisa setup. In late July the 200-day average stood near 24,790, according to 5paisa. The 23 October setup said a sustained move above 23,076.90 would improve the recovery outlook. It also said a break below 22,534.85 could extend the decline.
The chart below shows the iShares India 50 ETF, a US-listed fund that tracks the Nifty 50.
USD/INR Levels
Source: Trading Economics, Pound Sterling Live. The 2026 high and low are daily mid-rates from Pound Sterling Live. Past performance is not a reliable indicator of future results.
India Manufacturing Production Outlook
Leading Indicators
Early signals for October are mixed. Demand looks firm. Inventories are building fast.
Source: Trading Economics, KNN India, Business Today, Business Today. Past performance is not a reliable indicator of future results.
The record build in finished goods stocks deserves attention. If orders slow, firms may cut output in the following months.
India Manufacturing Production Forecast
Forecasts for the rest of the fiscal year point to slower growth. They are estimates and can change quickly.
Source: Trading Economics IIP, Trading Economics India forecasts, Free Press Journal, Trading Economics currency forecasts, Trading Economics commodity forecasts. Forecasts are not a reliable indicator of future performance.
Large brokerages cut their Nifty targets in April 2026, when the index stood near 24,173. JPMorgan set a base case of 27,000 with a bear case of 20,500. Nomura lowered its December target to 24,900, as Multibagg reported. These targets predate the latest oil spike and may have changed since. Forecasts are not a reliable indicator of future performance.
Illustrative Scenarios for October Data
The scenarios below are illustrative. They show how the next release could play out under different conditions.
Forecasts are not a reliable indicator of future performance. Scenarios are illustrative only and do not predict outcomes.
India Economic Calendar November 2026
These are the next dates that could shape the Indian macro story. Times assume the usual MOSPI release slot.
Source: FedRateCalc, Trading Economics CPI, Trading Economics IIP, Trading Economics GDP, 5paisa, Federal Reserve.
US clocks change on 1 November, so ET is UTC-5 from that date. MOSPI plans to publish October industrial production data on 30 November. The Admirals economic calendar lists these events with times.
Trading Around IIP Data: What Traders Often Watch
This section describes common market practice. It is general information and does not tell anyone what to do.
What Markets Have Often Reacted To
- Traders often compare the actual figure with the consensus.
- Revisions to the previous month can matter as much as the new print.
- The rupee has often reacted more to oil prices than to the IIP.
- Equity moves around the release have often been small.
- Many analysts read the IIP together with PMI data for a fuller picture.
A basic grasp of fundamental analysis helps explain why some releases move prices and others do not. Readers new to Indian assets can also look at our guide to India ETFs. Our earlier September IIP preview set out expectations before the release.
Pros and Cons of Trading Around Macro Releases
Prepared by the author from general market practice.
Market Access With CFDs
Admirals offers CFDs on Forex and commodities. It also offers index CFDs and CFDs on selected ETFs. The contract specifications list a CFD on the iShares India 50 ETF (#INDY) and a Brent crude oil CFD. USD/INR did not appear in the contract specifications we checked at the time of writing. Product availability can vary by region.
Clients can trade commodity CFDs such as Brent. They can also access Forex CFDs on major currency pairs and index CFDs on global benchmarks. A demo account uses virtual funds, and results may differ from live trading.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Traders often use stop-loss orders and smaller position sizes to manage risk around data releases. These tools do not remove the risk of loss. Gaps can cause orders to fill at worse prices.
Key Takeaways
- Growth in India manufacturing production slowed to 7.6% in September 2026 from 8.6% in August.
- Headline IIP grew 6.7%, below the 7.3% Reuters consensus.
- Mining fell 6.2% against a high base.
- Electrical equipment and vehicles led manufacturing growth.
- Oil above $115 and the RBI's tightening cloud the outlook.
- October data is due on 30 November 2026.
Frequently Asked Questions
What was India manufacturing production in September 2026?
Manufacturing output grew 7.6% year on year in September 2026, slowing from a revised 8.6% in August, per MOSPI.
What Is IIP in India?
The Index of Industrial Production tracks monthly output in four sectors, led by manufacturing. MOSPI publishes it every month.
Why did India industrial production slow in September 2026?
Mining contracted 6.2% against a high base, and capital goods growth eased. Weak rural demand may also have weighed.
How Is IIP Calculated?
MOSPI compiles monthly output data from 16 source agencies. Weights mainly reflect 2022-23 gross value added.
When is the next IIP data release?
MOSPI is scheduled to publish October 2026 IIP data on 30 November 2026 at 16:00 IST, which is 10:30 UTC.
How does IIP data affect the rupee?
The IIP has often had a small direct effect on the rupee. Oil prices and capital flows usually matter more.
Is India manufacturing growth still strong?
Growth of 7.6% remains above the 5.9% long-run average, though it slowed from August and faces oil and rate risks.
Some of this report's figures are quick estimates. They may change when MOSPI publishes revisions.
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