Capital goods surge reflects strong investment demand as industrial growth loses pace: BoB Report
New Delhi, June 2
Capital goods output emerged as the strongest-performing segment of India's industrial sector in April 2026, registering a robust 16 per cent growth even as overall industrial production growth eased to 4.9 per cent, according to a report by Bank of Baroda based on the revised Index of Industrial Production series.
Industrial production grew 4.9 per cent in April 2026, lower than the 5.7 per cent growth recorded in the corresponding month last year. The report noted that slower growth was visible across sectors, with mining output contracting and manufacturing, electricity, and water supply witnessing deceleration.
However, capital goods bucked the broader trend and continued to record double-digit growth.
"Within use-based classification, capital goods output shines and again registered a robust double digit growth of 16% in Apr'26 against 13.8% in Apr'25," the report said.
The growth in capital goods was significantly higher than the overall industrial production growth rate and also exceeded the pace recorded a year ago.
Besides capital goods, infrastructure and construction goods output rose 7.1 per cent in April 2026 from 6.4 per cent in April 2025, while intermediate goods output increased 7.7 per cent compared with 7.6 per cent a year earlier.
In contrast, primary goods output growth slowed sharply to 0.8 per cent from 3.3 per cent in April 2025. Consumer goods, including durable and FMCG goods, also registered "much slower growth in Apr'26 as compared with last year," according to the report.
At the sectoral level, manufacturing output grew 6.2 per cent in April 2026, marginally lower than 6.4 per cent a year ago. Electricity generation growth moderated to 4.9 per cent from 6.1 per cent, while mining output contracted 5.1 per cent after recording 0.6 per cent growth in April 2025.
The report said global challenges continue to pose downside risks to industrial growth, with certain industries potentially facing direct impacts from supply-chain disruptions, higher input costs and elevated energy prices.
"However, these disruptions are expected to be short term and needs careful monitoring," the report added.
The revised IIP series has expanded coverage and increased the number of items in the basket to 463 from 407 earlier, incorporating sectors such as water supply, sewerage and waste management activities.
— ANI
Reader Comments
Interesting that capital goods and infrastructure goods are doing well - that's a positive sign for long-term investment demand. But consumer goods slowdown is worrying, especially FMCG. Common aadmi ki purchasing power par dhyan dena hoga. 👀
Capital goods shining? Good. But electricity growth slowing and mining contracting? Not good. We need to ensure energy security for the next decade - thermal, solar, nuclear, everything. Global supply chain issues are real but India should use this as opportunity to boost domestic manufacturing.
Revised IIP series with 463 items and including water supply/sewerage - that's a step towards better data. But honestly, these numbers don't always match ground reality. In my village, small industries are still struggling with raw material costs. Hope the government monitors these disruptions carefully. 🙏
Capital goods growth is indeed a sign of investment, but overall deceleration means we are still not firing on all cylinders. Consumer goods slowdown is a red flag - if people aren't buying, stimulus should be demand-side focused. RBI should consider rate cuts to boost consumption. Just my two paise. 🏭
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