India: Steady industrial activity

Research evidence excerpt

India: Steady industrial activity

Global Markets Research

29 June 2026Asia Insights

Economics - Asia ex-Japan

Research Analysts

India: Steady industrial activity Asia Economics

Aurodeep Nandi - NFASL

IP growth beat expectations, despite the Iran war. With easing commodity aurodeep.nandi@nomura.com

prices, we see an upside risk to our FY27 GDP growth forecast of 6.6%. +91 22 4037 4087

Sonal Varma - NSL

• Industrial resilience: Industrial production (IP) growth rose to 5.1% y-o-y in May from sonal.varma@nomura.com

4.9% in April, with capital and consumer durable goods posting solid output growth, +65 6433 6527

and some recovery in the lagging primary and consumer non-durable goods. By

contrast, intermediate goods' growth sharply moderated over the month.

• Three-tiered growth: We identify three key blocs within the industrial sector. The

outperformers include sectors like electronic goods and equipment, autos, textiles,

renewable energy, fabricated metals, and metallic minerals. The laggards are fuels,

non-metallic minerals, apparels, and chemicals. In the middle are sectors like food

products, pharmaceuticals, rubber, machinery, and non-renewable electricity.

• Cautiously optimistic: The IP data suggest that Iran war shocks have been localised

to a few industrial input related sectors rather than causing a broad-based drag. We

remain alert to the lagged impact of higher prices and possible risk to rural demand

from poor monsoons, but the sharp fall in commodity prices, and the normalisation of

geopolitical tensions are emerging tailwinds in our view. We attach upside risk to our

baseline FY27 GDP growth forecast of 6.6%.

Solid show continues

Headline numbers

IP growth rose to 5.1% y-o-y in May from 4.9% in April, above expectations (Consensus: