India’s industrial production growth, measured by the Index of Industrial Production (IIP), dropped to 2.9 per cent in the month of February from 5 per cent in January, official data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed on Friday. The slowdown reflected a broad-based moderation across key sectors. January growth was at an eight-month high driven by an uptick in the critical manufacturing sector.
The growth rates of the three sectors dropped considerably. Mining posted growth of 1.6 per cent as against 4.4 per cent during the previous month, showing weakness in output from extractive industries. Electricity grew by 3.6 per cent as compared to 2.4 per cent in January, reporting a better performance. Manufacturing meanwhile, which has the highest weight in the IIP, grew 2.9 per cent in February as against 5.5 per cent in January.
The Quick Estimates of IIP stood at 151.3 against 147.1 in February 2024. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2025 came in at 141.9, 148.6 and 194.0 respectively.
As per the use base classification, the indices stood at 152.3 for Primary Goods, 115.5 for Capital Goods, 159.9 for Intermediate Goods and 191.3 for Infrastructure/ Construction Goods for the month of February 2025. Further, the indices for Consumer durables and Consumer non-durables stand at 126.5 and 146.7 respectively.
The corresponding growth rates of IIP as per use-based classification in February 2025 over February 2024 are 2.8 per cent in Primary goods, 8.2 per cent in Capital goods, 1.5 per cent in Intermediate goods, 6.6 per cent in Infrastructure/ Construction Goods, 3.8 per cent in Consumer durables and (-)2.1 per cent in Consumer non-durables. “Based on use-based classification, the top three positive contributors to the growth of IIP for the month of February 2025 are – Infrastructure/ construction goods, Primary goods, and Capital goods,” the release stated.
Reacting on this, Aditi Nayar, Chief Economist, Head – Research & Outreach, ICRA Ltd, said, “As expected, the leap year base pulled down the YoY growth of the IIP to 2.9 per cent in February 2025 from 5.2 per cent in January 2025, largely in line with ICRA’s forecast for the month (+3.0 per cent). The deceleration was broad-based, with all the use-based categories, as well as two of the three sectors barring electricity, witnessing a slower growth in February 2025 vis-à-vis the previous month. Following the base effect induced slowdown in February 2025, the YoY performance of most of the available high frequency indicators improved in March 2025, including electricity generation and the mobility and transport-related indicators, such as GST e-way bill generation, port cargo traffic, diesel consumption, petrol consumption, and vehicle registrations. While steel consumption declined in March 2025, this was dampened by a high base.”