Industrial Output Growth Slows to 10-mth Low in June
New Delhi: India's industrial output growth slowed to a 10-month low at 1.5% in June, pulled down by contraction in mining and electricity sectors and subdued performance by the manufacturing sector, official data showed Monday.
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The
Index of Industrial Production
(IIP) expanded 1.9% in May and 4.7% in June 2024.
"Excess rains in the second half of June 2025 are likely to have weighed on mining output, while also leading to a contraction in electricity generation, although the extent of the same narrowed compared to the previous month," said Aditi Nayar, chief economist at ratings firm
ICRA
.
Among the three major sectors, only manufacturing grew in June, by 3.9%. Production shrank 8.7% in mining and 2.6% in electricity.
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"A marginal pickup in the
manufacturing sector growth
was more than offset by contraction in both the mining and electricity sector output," said Rajani Sinha, chief economist at CareEdge Ratings.
Average IIP growth dropped to 2% in the first quarter of the current fiscal year from 5.4% a year earlier.
Nayar estimates industrial GVA (gross value added) growth to have decelerated in the first quarter ended June.
Industrial GVA growth was 6.8% in the January-March quarter. Official figures for the June quarter will be released in August.
Within the manufacturing sector, 15 of the 23 industry groups recorded growth in June.
In terms of use-based classification, two out of the six categories recorded a contraction: primary goods (3%) and consumer non-durables (0.4%).
"The contraction in primary goods output reflects the weaker performance of mining," noted Nayar.
On the positive side, infrastructure/construction goods led growth with a 7.2% increase.
"While private capex is yet to show meaningful traction, public capex continues to remain encouraging. However, persistent global uncertainties are weighing on the overall investment sentiment," said Sinha.
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