India’s industrial output slowed down to 2.7 per cent in April 2025, from a revised growth of 3.9 per cent in March 2025, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI) on Wednesday. While the overall numbers show moderation, experts say the performance was better than expected, with some positive signs in manufacturing and capital goods.
India’s industrial production grew by a higher-than-expected
Rajani Sinha, Chief Economist at CareEdge Ratings, noted that the manufacturing sector grew relatively well by 3.4 per cent and supported overall growth, even as mining output contracted and electricity growth slowed. “India’s industrial production grew by a higher-than-expected 2.7 per cent in April from an upwardly revised 3.9 per cent in the previous month. Manufacturing sector growth held up relatively well at 3.4 per cent, supporting the overall IIP growth, while a contraction in the mining output and moderation in electricity output exerted downward pressures.”
She added that the output of consumer durable goods showed encouraging growth, but consumer non-durables remained weak for the third consecutive month. “Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery,” she said.
According to the MoSPI data, the indices for consumer durables and consumer non-durables stood at 127.2 and 148.4, respectively.
Sinha highlighted rural demand as a bright spot, supported by a favourable agricultural outlook and a normal monsoon forecast. “However, a durable urban demand recovery is yet to be seen. Furthermore, the continued improvement in the inflation scenario, led by the easing of food inflation, is a key tailwind for the demand recovery,” she added.
Capex goods output surged, but experts flag global economic risks
Capital goods output surged by 20.3 per cent in April, helped by a low base. Sinha pointed out that this was a positive sign but warned about weak momentum in government capital expenditure. “The Centre’s capex contracted by 4 per cent during Jan-Feb FY25, following a pick-up in Q3. Given this weak momentum, the pace of capex revival remains a critical watch-out going ahead,” she said.
She also flagged global economic risks, saying, “Though the US has put the reciprocal tariffs on a 90-day hold, we expect global economic uncertainty to persist going forward. This is likely to weigh on both the private investment and consumption impulses.”
Non-core sectors showing resilience: ICRA
Aditi Nayar, Chief Economist and Head of Research & Outreach at ICRA Limited, said that the IIP dip in April was smaller than expected, despite a sharp fall in core sector growth. “The extent of the dip was much lower than expectations given the slump in the core sector growth, suggesting that the non-core portion of the IIP witnessed relatively healthier growth,” she said.
While manufacturing output growth was subdued, Nayar noted that non-oil exports had seen strong double-digit growth in April, indicating possible round-tripping. She also pointed out, “The performance of the use-based sectors was mixed, with three of the six witnessing an improvement, including capital goods, intermediate goods, and consumer non-durables.”
The indices stood at 114.3 for capital goods, 164.2 for intermediate goods, and 148.4 for consumer non-durables.
Experts warn of near-term risks
Sankar Chakraborti, MD & CEO of Acuité Ratings & Research, called the IIP data a “moderately positive start” to the new fiscal year. “This was despite a disappointing core sector performance that accounts for over 40 per cent of the index. Manufacturing was the main driver, expanding by 3.4 per cent, led by robust growth in machinery and equipment (17.0 per cent), motor vehicles (15.4 per cent), and basic metals (4.9 per cent),” he said.
“These gains reflect improving momentum in investment-linked and transport-related sectors, hinting at a revival in private capex,” he added.
However, he also noted an uneven recovery, with contractions in pharmaceuticals (-3.9 per cent) and chemicals (-3.6 per cent), likely due to global headwinds.
Looking ahead, Chakraborti warned of near-term risks due to weather patterns and global tensions. “The trajectory of industrial growth in FY26 will depend on a normal monsoon… with trade tensions between the US and the EU growing and the global growth outlook still dim,” he said.
