India's Industrial Growth Shows Slight Improvement in March

India's industrial output experienced a 3% growth in March 2025, marking a slight improvement from February's 2.7%. However, this growth is down from the 5.5% recorded in March 2024, primarily due to weaker performances in the manufacturing, mining, and power sectors.

Fiscal Year 2024-25 Records Lowest Growth in Four Years

The Index of Industrial Production (IIP) for the fiscal year 2024-25 expanded by 4%, the lowest growth rate in four years. This is significantly lower than the 5.9% growth in 2023-24 and the 11.4% growth in 2021-22, with the previous low being -8.4% in 2020-21.

Sector-Wise Performance Highlights

Manufacturing grew by 3% in March 2025, down from 5.9% a year earlier. Mining output saw a sharp decline, increasing by only 0.4% compared to 1.3% in March 2024. Power generation growth also eased from 8.6% to 6.3%.

Expert Insights

Aditi Nayar, Chief Economist at Icra, noted that while there was a slight improvement in electricity and manufacturing growth, these gains were offset by the slowdown in mining. She emphasized the need to monitor whether the frontloading in exports to the US is a redirection away from other geographies or an increase in output.

Use-Based Classification Data

The capital goods sector growth decelerated to 2.4% from 7% the previous year. Consumer durables grew 6.6%, slower than the 9.5% growth in March 2024, while consumer non-durables contracted by 4.7%. The infrastructure and construction goods segment reported an 8.8% growth, slightly up from 7.4% in March 2024.