India’s industrial production slows to a 6-month low in February

The core sector, which has a 40% weight in the index of industrial production, had dropped to a five-month low in February.

IIP Growth Falls to 2.9% Amid Broad-Based Slowdown

India’s industrial production growth dropped to a six-month low of 2.9% in February 2025, down from 5.2% in January, according to data released on April 11. The decline reflects a broad-based slowdown across key sectors, aligning with a similar drop in core infrastructure output, which also fell to 2.9%, the lowest in five months.

Leap Year Base Impact and Sector-Wise Trends

The February slowdown was largely expected, as highlighted by ICRA Chief Economist Aditi Nayar, who attributed the dip to the leap year base effect. The use-based and sectoral data indicate weaker growth across the board—with manufacturing and mining leading the decline, while electricity was the lone sector to register improved performance.

• Electricity: Growth increased to 3.6% (up from 2.4% in January)
• Manufacturing: Slowed to 2.9% (down from 5.8%)
• Mining: Fell to 1.6%, a four-month low (from 4.4%)

Use-Based Industry Breakdown

All six use-based categories reported either slower growth or outright contraction:

• Consumer non-durables: Contracted 1.8%, worsening from -0.3%
• Consumer durables: Growth slowed to 3.9% from 7.2%
• Capital goods: Maintained relative strength with 9% growth (down from 10.3%)
• Infrastructure/construction goods: Slipped to 6.4% from 7.4%

Year-to-Date Performance Also Weakens

In the April–February period, industrial output expanded by 4.1%, a noticeable drop from 6% growth recorded during the same period last fiscal year. The consistent slowdown across both IIP and core sectors indicates underlying weakness in industrial demand and production momentum.

Outlook

While capital goods and construction segments continue to provide some resilience, the overall moderation suggests that domestic consumption and export-linked manufacturing remain subdued. Analysts may continue to revise growth projections downward unless upcoming months show signs of recovery.