India's Industrial Sector Faces a Slowdown

According to a report by Bank of Baroda, India's industrial sector is projected to grow at a slower pace of 6.2% in FY25, a significant drop from the 9.5% growth seen in FY24. This slowdown is attributed to the base effect and a lackluster performance in the manufacturing sector during the first half of the fiscal year.

Signs of Recovery Emerge

Despite the slowdown, there are signs of recovery in the second half of FY25. Improved GST collections, steady Purchasing Managers' Indices (PMIs), and increased capital expenditure are expected to support this revival. The upcoming Union Budget is also anticipated to introduce measures aimed at boosting manufacturing growth and accelerating the investment cycle.

Industrial Production Hits a Six-Month High

In November 2024, India's industrial production surged to a six-month high, registering a robust 5.2% growth compared to 3.7% in October. This improvement was driven by broad-based expansion across the manufacturing, mining, and electricity sectors. The manufacturing sector, in particular, led the charge with an impressive 5.8% growth, the highest in eight months.

Looking Ahead

While November's data reflects strong momentum, growth for the fiscal year to date has moderated. Attention now shifts to the upcoming Union Budget and RBI policy announcements, both expected to be growth-focused. With the right measures, the industrial sector could see a significant revival in the latter half of FY25.