India’s industrial activity stays robust, consumption recovery seen ahead: Report

New Delhi, Aug 29 (IANS) India’s industrial production remained healthy, registering growth of 6.7 per cent in July 2026, compared with 5.4 per cent in July 2025 and the growth was driven by stronger manufacturing and electricity generation, a report said on Saturday.

The report from Bank of Baroda said manufacturing rose 7.3 per cent in the month supported by manufacture of clothing, chemicals, computer and electronics, electrical equipment, motor vehicles, and other transport equipment.

The bank forecasted recovery in industrial production with a pickup expected in consumption demand and manufacturing sector along with rural demand supporting growth.

Further, consumer durables are on strong footing which speaks of sustained urban demand, the report said.

Manufacturing activity is also expected to get support from sector-specific policy initiatives in place and India’s attempt to diversify its trade basket. However, the impact on margins of producers is likely to continue as the supply chain normalisation will take some time till the war situation between US and Iran resolves.

Output of capital goods, intermediate goods, and consumer durables also improved notably in July 26 compared with last year. Heatwave conditions have supported demand for consumer durables so far, the report noted.

The report forecasted global commodity prices to remain volatile as tensions between US and Iran remain escalated, and key shipping routes still under threat.

“Limited pass-through in output prices implies that margins can be expected to remain under pressure for some more time, until shipping activity normalises. Hence, we maintain a cautious view on our full year IIP growth forecast,” the report said.

However, domestic measures to boost manufacturing and limited impact of erratic monsoon on consumer demand, will help support growth.

Within use‑based classification, capital goods output surged 16.1 per cent versus 5.9 per cent a year earlier, with a cumulative run‑rate of 15.4 per cent. Intermediate goods rose 10 per cent, while consumer durables grew 10.5 per cent and infrastructure and construction goods moderated to 6.9 per cent.

—IANS

aar/ag