India’s industrial output growth slowed sharply to 2.7% in April from an upwardly revised 3.9% in March and 5.2% in the corresponding month of the previous fiscal, as all three sectors making up the Index of Industrial Production (IIP) saw a decline.
This is the lowest growth in eight months – the previous low was the flat growth in August last year. In February this year, IIP grew marginally higher than in April at 2.71%.
The manufacturing sector that has a weight of 77.6% in the index grew just 3.4% during the month compared to 4% in March. The electricity production with a weight of 7.9% in IIP grew 1.1% in April, against 7.5% in March.
The mining sector output, with a weight of 14.3% in the index, contracted 0.2% in April from a growth of 1.2% in March.
Within manufacturing, the output of coke and refined petroleum products was down 2.1%, while production of chemicals was down 3.6% and pharma 3.9%.
The support to manufacturing, however, came from growth in computer and electronics (10.5%), electrical equipment (15..2%), machinery (17%), motor vehicles (15.4%) and metal products (12.7%).
“The number of sectors having positive growth in April 2025 touched a three-month high of 16 (January 2025: 19). However, the combined weight of these 16 sectors in manufacturing is 49.7%. Furthermore, only 11 sub-sectors out of a total 23, had a higher year-on-year growth than the overall output growth in April 2025, illustrating the skewness in the industrial growth,” Paras Jasrai, economist at India Ratings, said.
As per use-based classification, the capital goods sector performed the best with a growth of 20.3% in April from 3.6% in March, indicating strong investment demand. Intermediate goods growth was 4.1% in April, up from 3.8% in March.
Infrastructure and construction goods, which have been consistently performing better than others, grew 4.0% in April, down from 9.9% in March. Consumer durables saw the growth decline to 6.4% from 6.9%.
The consumer durable sector’s decline continued. In April, the contraction in the sector was down to -1.7% from -4.0%. The primary goods sector with the highest weight was down 0.4% during the month from a growth of 3.9% in March.
“The unseasonal rains could also impact the construction goods output. This along with an unfavourable base effect (May 2024: 6.3% y-o-y) would keep the factory output growth under 2% y-o-y in May 2025,” Jasrai said.
“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. Nevertheless, expectations of a further rate cut by the RBI amid easing price pressures are expected to offer some support,” Rajani Sinha, chief economist at CareEdge Ratings, said.