Index of Industrial Production (IIP)- Overall

What is the significance of IIP Total data?

The Index of Industrial Production (IIP) measures short-term changes in the volume of industrial output across India's manufacturing, mining, and electricity sectors. It is one of the most important high-frequency indicators of economic health, released monthly by MoSPI. The IIP gives investors, businesses, and policymakers a timely read on whether industrial activity is expanding or contracting, before the quarterly GDP data is available. A sustained rise signals robust industrial demand and is often associated with employment growth and improved corporate earnings.

How to interpret the IIP Total data?

IIP is expressed as an index relative to a base year (currently 2011-12 = 100). A month-on-month or year-on-year increase signals expansion. Seasonality can distort single-month readings, so analysts typically look at three-month moving averages for a cleaner trend. Sharp dips can indicate supply disruptions, weak demand, or festival-related base effects. In India, IIP is considered a lead indicator for quarterly GDP and corporate earnings, making it closely watched by both equity and fixed income markets.

What does the IIP Total data represent?

IIP Total represents the aggregate output of India's industrial sector, covering three broad segments: manufacturing (~78%), mining (~14%), and electricity (~8%). It tracks changes in physical output, not prices, making it a real measure of industrial activity. The data is compiled by MoSPI using production figures from across the country. IIP is also broken down by use-based categories: capital goods, consumer durables, intermediates, and infrastructure, which helps analysts identify which parts of the industrial economy are driving growth or facing headwinds.