Temporary respite: On the June 2026 data for the Index of Industrial Production

The June 2026 data for the Index of Industrial Production has come as a pleasant surprise. The 23-month high growth rate of 7.3% of the overall index was unexpected given the significant economic headwinds from the West Asia crisis and a deficient monsoon. Some of the growth was due to a low base, since the performance last June was the worst in nearly a year, but the numbers nevertheless indicate resilience. The manufacturing sector accelerated due to a dual push from the domestic and the external sectors. Consumer durables growth remained above 7% for the second consecutive month, and the non-durables sector saw growth quicken to a six-month high. At the same time, data from the Commerce Ministry showed that merchandise exports grew 15.5% in June, revealing demand from abroad. The capital goods sector also saw double-digit growth.