August 28, 2025
Manufacturing grew 5.4% in July, its strongest in six months, while mining contracted by 7.2% and power rose only 0.6%
Growth in the April–July FY26 period slowed to 2.3%, compared with 5.4% in the same period last year
All six use-based categories improved, led by construction and infrastructure goods which surged 11.9%
Consumer durables grew 7.7%, boosted by pre-festive demand and GST e-way bill activity
India’s industrial production growth accelerated to a four-month high of 3.5% in July, up from 1.5% in June, according to data released by the National Statistical Office (NSO) on Thursday. The improvement was largely driven by the performance of the manufacturing sector.
The latest data showed that the country had last recorded comparable growth at 3.9% in March 2025. Industrial output, measured by the Index of Industrial Production (IIP), had grown by 5% in July 2024. The NSO also confirmed that June’s growth remained unchanged at 1.5% against provisional estimates.
In July 2025, manufacturing output expanded by 5.4% compared to 4.7% in the same month of the previous year. Mining output, however, contracted sharply by 7.2%, contrasting with 3.8% growth a year earlier. Power generation increased marginally by 0.6%, well below the 7.9% rise seen in July 2024.
For the April–July period of FY26, overall industrial production grew by 2.3%, significantly lower than the 5.4% recorded during the same period a year ago.
ICRA Chief Economist Aditi Nayar said IIP growth strengthened to a four-month high in July, supported by a broad-based improvement across sectors. However, mining and electricity continued to weigh on overall performance. She noted that manufacturing growth rose to a six-month high of 5.4% in July, aided by demand for construction inputs and consumer durables.
According to a use-based classification, all six categories demonstrated improved performance. Infrastructure and construction goods output surged to a 21-month high of 11.9%, supported by strong growth in cement and steel, indicating robust construction activity. Consumer durables also grew 7.7%, the highest in seven months, helped by pre-festive stocking in line with an uptick in GST e-way bills.
Looking ahead, Nayar observed that stronger transmission of monetary easing and the planned GST rationalisation could boost urban consumption. However, discretionary demand may be deferred until lower tax rates take effect.
Source: Economic Times