The growth in the Index of Industrial Production (IIP) accelerated to a 25-month high of 6.7% in November, driven by an 8% jump in manufacturing, strong consumption demand, and a turnaround in the mining industry.
Companies stepped up manufacturing to cater to the rising demand during the festive season, and as a result, the consumer goods segment grew 8.5% on year in the month.
Growth over time
IIP had grown at a dismal, 14-month low pace of 0.5% in October. The November growth in the index was on a relatively strong base (5%).
Rajani Sinha, chief economist at CareEdge said: “Sharp growth uptick seen in the manufacturing sector (8% versus 2% in Oct) and a turnaround in mining sector performance (5.4% versus -1.8%) supported the overall IIP growth, more than offsetting the contraction in electricity output.”
On the demand front, she added, the positive aspect was the improvement in the output of consumer durables and nondurables which grew by 10.3% and 7.3%, respectively, reversing the contraction seen in the previous months. Consumer goods output had contracted 3.5% in October.
What did Rajeev Juneja say?
According to Rajeev Juneja, president, PHD Chamber of Commerce and Industry (PHDCCI), 20 out of 23 industry groups at National Industrial Classification 2-digit-level have recorded a positive growth in November 2025 over November 2024 in the manufacturing sector. The top three positive manufacturing-sector contributors in November 2025 are – “basic metals” (10.2%), “ pharmaceuticals, medicinal chemical and botanical products” (10.5%) and “motor vehicles, trailers and semi-trailers” (11.9%), he noted.
Dipti Deshpande, principal economist at Crisil Ltd, observed that robust consumption demand and strong merchandise exports supported IIP growth. Infrastructure and construction goods (12.1% vs 7.1%), capital goods (10.4% vs 2.1%) and consumer durables (10.3% vs -1.3%) saw double-digit growth Intermediate goods (7.3% vs 2.5%), consumer non-durables (7.3% vs -5.2%) and primary goods (2% vs -0.6%), too, had a good outing, Deshpande added.
The first eight months have seen slower IIP growth at 3.3% compared with 4.2% in the same period last fiscal because of sluggish exports. However, in the road ahead, robust consumption demand on the back of reduction in interest rates, soft inflation and income-tax relief should support industrial production,she added.
Icra Chief Economist Aditi Nayar expects the IIP growth to ease to 3.5-5% in December 2025, as the base effect normalises and the benefit from restocking wanes.
“The impact of the US tariffs and penalties is likely to reflect across some of the manufacturing segments, partly offsetting the positive impact of the GST rate rejig. However, electricity demand has expanded in December 2025 after a gap of two months, which should boost power generation in the month, auguring well for IIP growth in the month,” Nayar said.
Devendra Kumar Pant, Chief Economist at India Ratings and Research said all six used-based sectors expanded in November 2025 after a gap of nine months.
“More importantly, the consumer non-durable sector grew 7.3%, the highest in the last 25 months. High consumer non-durable growth post festive season suggests i) the inventories both with wholesaler and manufacturer have exhausted and ii) according to the manufacturer’s assessment, the demand is likely to continue.
These numbers have given anecdotal evidence that the GST rationalization has pushed demand in the economy. This coupled with low inflation would continue to push demand,” Pant said.