Industrial production in India slowed sharply in October, rising just 0.4%, the weakest expansion in the last 14 months, signalling a decline in the economy. The latest reading of the Index of Industrial Production (IIP) marks a downturn from September’s 4% growth and also fell short of the 3.1% increase projected by economists in a Reuters poll.
According to the Ministry of Statistics & Program Implementation, the muted growth may largely be attributed to the reduced number of working days in October, which was packed, including Dussehra and Deepawali. It is the lowest industrial growth since August 2024.
The total number of productions rose by 1.8% in October, after 4.8% in September. As for mining activity and electricity production, they have deteriorated by 1.8% and 6.9%, respectively.
Despite slow industrial growth, Indian economic growth was faster than expected in the quarter ending in September, rising from 7.8% in the previous quarter.
Economists, however, remain cautiously optimistic. A principal economist at S&S Global, owned by the Indian research and credit rating company Crisil, Dipti Deshpande, said that ‘sturdy consumption demand’ in the October-December period would partially offset weaker export conditions and support manufacturing.
She added that robust rural incomes, low inflation, reduced interest rates, and recent tax relief should help keep consumption strong.
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The IIP remains a critical indicator of short-term industrial performance, tracking changes across all the sectors. Almost 8 Cr. industries, including steel, cement, electricity, and fertiliser, make up to 40% of the index weight.
