Faster than the growth in January; India’s industrial growth held a positive surprise in February
Delhi: India’s industrial growth held a positive surprise in February 2026, coming in at 5.2%, marginally faster than the growth in January. Apart from November and December last year, February’s industrial performance — as measured by the Index of Industrial Production (IIP) — was the best in nearly two years.
Why this was a surprise because this performance diverges quite sharply from what was indicated by the Index of Eight Core Industries released earlier this month. The eight core sectors — crude oil, natural gas, refinery products, coal, fertilizers, steel, cement, and electricity — saw their combined growth slow to 2.3% in February, about half the growth rate in January. These core sectors have a weightage of about 40% in the IIP, and so the expectation was that they would drag the IIP down too.
This would imply that sectors outside the core ones did well. Most notably, the manufacturing sector in the IIP saw growth accelerate to a respectable 6% in February. The capital goods sector’s growth accelerated to a 28-month high of 12.5%, on an already strong base of 8.1%. These are good signs for labour and capital. What is more concerning is that some elements of consumer demand are going in the opposite direction. Consumer durables grew 7.3%, but consumer non-durables contracted 0.6%, the second consecutive month of shrinkage. It had contracted in February last year as well, so this was not a statistical anomaly.
