The country’s industrial production growth slowed to a nine-month low of 1.2% in May 2025 on the back of poor performance of manufacturing, mining and power sectors caused by the early onset of Monsoon, according to the official data released on Monday.
In the same month the previous year, factory output, measured in terms of the Index of Industrial Production (IIP), had expanded by 6.3%, the data from the National Statistics Office showed. The industrial production growth was also revised downward for April to 2.6% from the earlier estimate of 2.7% released last month. The previous low was observed in August 2024 when IIP remained unchanged. The NSO data showed the manufacturing sector’s output growth fell to 2.6% in May 2025 from 5.1% in the year-ago month.
Mining production fell by 0.1% against a growth of 6.6% a year ago. Power production declined by 5.8% in May 2025 as compared to 13.7% growth in the year-ago period. During the April-May period of FY26, industrial production surged by 1.8% compared to 5.7% a year ago.
“The early onset of the monsoon doused activity in mining and the demand for electricity, with both these sub-sectors of the IIP reporting a contraction in May 2025, amidst an anaemic growth of manufacturing,” said Aditi Nayar Chief Economist, Head - Research & Outreach, ICRA.
The underlying trends were uneven, with three of the use-based categories displaying a contraction, amid a continued high 14.1% expansion in capital goods, boosted by a low base, Nayar added.
She added that the tepid industrial volume growth in the first two months of the quarter does not augur well for industrial GVA (gross value added) growth in Q1FY26.
As per use-based classification, the capital goods segment growth accelerated to 14.1% in May 2025 from 2.6% in the year-ago period. Consumer durables (or white goods production) fell by 0.7% during the reporting month against a growth of 12.6% in May 2024.