India’s capex engine stays strong as industrial growth slows: BoB Reports – Firstpost

India’s investment cycle continues to show resilience even as the broader industrial sector loses momentum, with capital goods emerging as the strongest-performing category in April 2026, according to a Bank of Baroda (BoB) report based on the revised Index of Industrial Production (IIP) series.

Capital goods output surged 16 per cent in April 2026, accelerating from 13.8 per cent growth recorded in April last year. The strong expansion reflects sustained demand for machinery and equipment, indicating that businesses continue to invest in capacity creation despite moderation in overall factory activity.

India’s industrial production growth slowed to 4.9 per cent in April 2026 compared with 5.7 per cent in the corresponding month of the previous year. According to the report, the slowdown was visible across key sectors, with mining witnessing a contraction while manufacturing, electricity, and water supply reported softer growth.

“Within use-based classification, capital goods output shines and again registered a robust double-digit growth of 16 per cent in April 2026 against 13.8 per cent in April 2025,” the BoB report said.

Capital goods performance is considered a key indicator of future investment trends as it reflects spending on infrastructure, factories, and production capacity. The latest numbers suggest that India’s capex momentum remains intact despite short-term pressure on industrial activity.

Analysts believe continued strength in investment-led sectors could support economic growth in the coming months. However, slower momentum in broader industrial categories highlights the need for a wider recovery across manufacturing and core sectors.

The report indicates a mixed picture for India’s economy, while headline industrial growth has cooled, strong capital goods demand points towards continued confidence in long-term expansion.