IIP growth slows to 8-month low in April over decline in mining output
NEW DELHI: India's
industrial production growth
fell to an eight-month low of 2.7% in April, dragged down by a contraction in mining output, high base effect and moderation in electricity production, official data released on Wednesday showed.
The Index of Industrial Production (
IIP
) had expanded 3.9% in the previous month and 5.2% in April 2024. Manufacturing grew 3.4% in the first month of 2025-26 on the back of a solid expansion in the automobile sector. While mining output contracted 0.2%, electricity generation increased a muted 1.1% year-on-year in April.
Within the
manufacturing sector
, 16 out of the 23 industry groups recorded positive growth.
"The slowdown, albeit mild, was broad-based driven by a weaker performance across all the three production sectors," said Aditi Nayar, chief economist,
ICRA
.
Only 11 of the total 23 manufacturing sub-sectors had a higher on-year growth than overall output growth in April, illustrating the skewness in industrial growth, according to Paras Jasrai, economist at
India Ratings and Research
.
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The silver lining in the data was the consumer durables and capital goods sector. The 6.4% expansion in consumer durables was driven by a 10.5% growth in electronic goods ahead of the upcoming marriage season. The auto sector reported a solid 15.4% growth.
However, consumer non-durables output declined 1.7%, highlighting the urban-rural divide.
"Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery... the continued improvement in the inflation scenario led by easing of food inflation is a key tailwind for the demand recovery," said Rajani Sinha, chief economist, CareEdge Ratings.
A 20.3% increase in capital goods was supported by both electrical and non-electrical machinery.
"It needs to be seen if this is maintained in the coming months as one is looking at investment to pick up," said Madan Sabnavis, chief economist,
Bank of Baroda
.
Infrastructure and construction goods output increased 4% in April while primary goods saw a marginal contraction of 0.4 %.
"On the whole the performance is encouraging and it will be important that there is further pickup in coming months," Sabnavis said.
Economists expect the unseasonal rains to impact construction goods output and keep factory output growth under 2% on-year in May.
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