Industrial Output Growth Slows to 6-Month Low of 2.9% in February

Ira Singh
Khabar Khabaron Ki,13 April’25

India’s industrial production growth declined to a six-month low of 2.9% in February 2025, down from 5.2% in January, according to official data released by the National Statistical Office (NSO) on Friday. The slowdown was primarily driven by subdued performance in the manufacturing and mining sectors.

Manufacturing, which carries the highest weight in the Index of Industrial Production (IIP), recorded a modest 2.9% growth in February, significantly lower than the 5.5% expansion seen in the previous month. Mining output also lost momentum, growing just 1.6% compared to 4.4% in January, indicating weakness in extractive industry activity.

On the other hand, the electricity sector posted improved performance, with output rising 3.6% in February, up from 2.4% in the previous month.

According to experts, a combination of high base effects and decelerating growth in key sectors contributed to the sharp moderation in industrial output. “Output growth across all use-based categories weakened in February, highlighting the volatile and muted nature of industrial activity,” noted an industry analyst.

Consumer goods output remained weak. Consumer durable production growth dropped to a 15-month low of 3.8%, while consumer non-durables witnessed a sharp contraction of 2.1% registering the third consecutive month of decline. Experts said this reflects broader weakness in consumption demand in February 2025.Despite the current slowdown, there are signs of improvement ahead. Experts pointed to the recent moderation in food inflation and the monetary policy easing measures implemented in February and April 2025, suggesting that their impact on industrial activity could be felt in FY26.

Experts noted that monitoring consumption trends remains essential given the uneven nature of domestic demand. While rural demand has shown signs of improvement, supported by strong agricultural output and expectations of a normal monsoon, urban demand continues to lag and remains a point of concern. The outlook for urban consumption is still uncertain and requires close attention in the coming months.

ICRA Chief Economist Aditi Nayar reportedly stated that industrial production growth is likely to hover around 3% in March, the final month of FY25. “While the growth performance of mining is expected to deteriorate in March relative to February, this is likely to be offset by an uptick in electricity generation, amid steady manufacturing growth,” she said.