New Delhi — India’s industrial output rose by 3% in March 2025, showing a slight uptick from 2.7% in February but falling sharply compared to 5.5% growth recorded in March last year, according to data released by the National Statistics Office (NSO) on Monday. The deceleration was largely attributed to subdued performances across the manufacturing, mining, and electricity sectors.
For the full fiscal year 2024-25, the Index of Industrial Production (IIP) grew by just 4%, marking the slowest annual expansion in four years. In comparison, industrial production rose 5.9% in 2023-24 and 11.4% in 2021-22. The last time growth was weaker was during the pandemic-impacted 2020-21 fiscal, when output shrank by 8.4%.
The government also revised February’s industrial growth downward to 2.7% from an earlier estimate of 2.9%, highlighting persistent softness in core sectors.
Sector-Wise Performance
- Manufacturing, which constitutes nearly 77% of the IIP, expanded by 3% in March — a notable slowdown from the 5.9% growth recorded a year ago.
- Mining output managed a marginal rise of 0.4%, slipping from 1.3% in March 2024.
- Electricity generation grew 6.3%, moderating from an 8.6% jump a year earlier.
Aditi Nayar, Chief Economist at Icra, noted that while there was some sequential improvement in electricity and manufacturing growth, it was largely offset by a dip in mining output. “Looking ahead, while there is some evidence and commentary around frontloading in exports to the US, we need to see whether this is driven by redirection away from other geographies or an actual bump in production,” she said.
Use-Based Classification Trends
The granular breakdown of industrial activity painted a mixed picture:
- Capital goods growth decelerated to 2.4% from 7% in March 2024, suggesting a softer investment momentum.
- Consumer durables expanded by 6.6%, slower than the 9.5% seen a year ago.
- Consumer non-durables, often considered a proxy for rural demand, contracted sharply by 4.7%, reversing the 5.2% growth registered last March.
- Infrastructure and construction goods stood out with 8.8% growth, up from 7.4%.
- Primary goods posted a modest 3.1% expansion, little changed from 3% last year.
- Intermediate goods output weakened to 2.3%, compared to 6.1% a year earlier.
Faster Data Release
In a bid to improve transparency and timeliness, the NSO has advanced the release date of the IIP data to the 28th of every month, cutting the publication lag from six weeks to four. Earlier, the IIP figures were released on the 12th of the following month.
The latest data points to a cooling in industrial momentum even as the broader economy continues to grow, raising fresh questions over the strength of the manufacturing revival and the sustainability of domestic demand in the months ahead.
