India’s industrial production growth slowed to 4.1% in March 2026 from 5.2% in February, weighed down by weaker electricity generation, even as manufacturing and mining remained supportive, according to official data released on Tuesday. At 4.1%, industrial output is at a five-month low. For the full financial year 2025-26, industrial output expanded 4.1%, marginally higher than 4% in the previous year.
Manufacturing, which carries the highest weight in the index, grew 4.3% in March, while mining output rose 5.5%. Electricity generation growth, however, slowed sharply to 0.8%, acting as a drag on the overall print.
Within manufacturing, 14 of 23 industry groups recorded positive growth during the month. Key contributors included manufacture of basic metals, which grew 8.6%, motor vehicles, trailers and semi-trailers at 18.1% per, and machinery and equipment at 11.2%.
Among use-based sectors, capital goods output — seen as a proxy for investment activity — posted robust growth of 14.6% in March, the highest among all categories. Infrastructure and construction goods output rose 6.7%, consumer durables increased 5.3%, while primary goods and intermediate goods grew 2.2% and 3.3%, respectively. Consumer non-durables rose a modest 1.1% per.
The slowdown in March, according to experts, is largely due to West Asia crisis.
“The March data captures only a part of the shock as uncertainty and weak producer sentiments have yet to fully manifest in production data. The deeper impact is expected to show up down the road, particularly in the first quarter of this fiscal,” says Dipti Deshpande, principal economist, Crisil Ltd.
According to experts, domestic manufacturing has begun to bear the brunt of costlier and tighter supplies of petroleum products and natural gas. The Purchasing Managers’ Index also slipped in March from February but remained in the expansion zone, indicating the likely uneven impact of the conflict across sectors and time based on their ability to absorb the shock. The impact on a sector’s output will occur when an input becomes more expensive or less available.