India's industrial output rises to 5.1%: Here's what it says about the economy

India's factory activity gained momentum in May, with industrial output rising 5.1%, up from 4.9% in April. 

The growth was driven by strong manufacturing and a sharp rise in electricity and gas production. 

The Index of Industrial Production (IIP) is one of the earliest health checks of India's economy. Released every month, it tracks whether factories, mines and power plants are producing more or less than before, offering an early read on economic momentum.

Noteworthy: this is also only the second IIP release under the new 2022-23 base year, with the government updating both the benchmark and the calculation method to better reflect today's economy.

What's driving the growth: manufacturing expanded 5.5%, while electricity and gas output surged 9.9%. Electrical equipment and motor vehicles led factory growth, while capital goods output jumped 12.9%, a sign that businesses are continuing to invest in machinery and infrastructure despite global uncertainties.