IIP grows at 1.5% in Jun-25 as contraction in mining and electricity output weighs
Within the manufacturing sector, 15 out of 23 industry groups at NIC 2 digit-level have recorded a positive growth in June 2025 over June 2024. The top three positive contributors for the month of June 2025 are Manufacture of basic metals (9.6%), Manufacture of coke and refined petroleum products (4.2%) and Manufacture of fabricated metal products, except machinery and equipment (15.2%).
The corresponding growth rates of IIP as per Use-based classification in June 2025 over June 2024 are -3% in Primary goods, 3.5% in Capital goods, 5.5% in Intermediate goods, 7.2% in Infrastructure/ Construction Goods, 2.9% in Consumer durables and - 0.4% in Consumer non-durables. Based on use-based classification, top three positive contributors to the growth of IIP for the month of June 2025 are Infrastructure/ construction goods, Intermediate goods and Consumer durables.
NSO also revised upwards the pace of industrial production growth for May to 1.9% from the initial estimate of 1.2% released last month. During the April-June period of FY26, industrial production grew by 2% compared to 5.4% a year ago. This marked lowest expansion in the first quarter in nearly three years for the industrial activity.
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For example, Australia maintains a list of sensitive sectors, including critical infrastructure, critical minerals, advanced technologies, investments near sensitive government sites, and those involving access to sensitive data, which are particularly subject to enhanced scrutiny under its investment regime. In fact, Australia not only screens foreign investments at the pre-entry stage but also exercises 'call-in' and 'last resort' powers to reassess previously approved investments if national security concerns arise—a safeguard that India can also consider US, in February 2025, also outlined specific sectors where it would restrict investments, particularly from China-affiliated entities. These sectors included advanced technology, critical infrastructure, healthcare, agriculture, energy, raw materials, and other strategically significant areas. On similar lines, Germany and Italy also cover a broad range of strategically sensitive sectors subject to strict scrutinising mechanisms, such as defence, critical infrastructure, healthcare, media, artificial intelligence, cybersecurity and data security, semiconductors, and other high-tech by carefully identifying its strategic and non-strategic sectors, India can consider restricting Chinese investments in areas critical to national sovereignty, such as defence, telecommunications, critical infrastructure, and emerging technologies, while continuing to permit and even encourage foreign equity inflows in its non-sensitive sectors. In non-strategic sectors, such as manufacturing, India could permit up to 49% equity from China—higher than the proposed 24%, provided there is a strong pre-entry screening mechanism, which could perhaps be more attractive for Chinese investors and at the same time would not compromise on national addition, India can work towards institutionalising post-approval review mechanisms, establishing a central registry to monitor foreign ownership patterns, and enabling conditional approvals, such as restrictions on board representation, mandatory technology transfer clauses, and periodic compliance writers Nisha Taneja is professor at ICRIER and Vasudha Upreti is Research Assistant.
