India’s industrial production growth slowed to a nine-month low of 1.2 per cent in May 2025 due to poor performance of manufacturing, mining and power sectors caused by the early onset of monsoon, according to official data released on mMonday.
Photograph: Praveen Paramasivam/Reuters
The factory output, measured in terms of the Index of Industrial Production (IIP), had expanded by 6.3 per cent in May 2024.
The National Statistics Office also revised downward the industrial production growth for April to 2.6 per cent from the earlier estimate of 2.7 per cent released last month.
The previous low was observed in August 2024 when IIP remained unchanged.
The NSO data showed that the manufacturing sector’s output growth decelerated to 2.6 per cent in May 2025 from 5.1 per cent in the year-ago month.
Mining production contracted by 0.1 per cent against a growth of 6.6 per cent a year ago.
Power production declined by 5.8 per cent in May 2025 against 13.7 per cent growth in the year-ago period.
During the April-May period of FY26, industrial production grew by 1.8 per cent compared to 5.7 per cent a year ago.
Aditi Nayar Chief Economist, Head – Research & Outreach, ICRA said, “The early onset of the monsoon doused activity in mining and the demand for electricity, with both these sub-sectors of the IIP reporting a contraction in May 2025, amidst an anaemic growth of manufacturing.
Moreover, the underlying trends were uneven, with three of the use-based categories displaying a contraction, amidst a continued high 14.1 per cent expansion in capital goods, boosted by a low base, Nayar said.
Tepid industrial volume growth in the first two months of the quarter does not augur well for industrial GVA (gross value added) growth in Q1 FY2026, she added.
As per use-based classification, the capital goods segment growth accelerated to 14.1 per cent in May 2025 from 2.6 per cent in the year-ago period.
Consumer durables (or white goods production) contracted by 0.7 per cent during the reporting month against a growth of 12.6 per cent in May 2024.
In May 2025, consumer non-durables output contracted 2.4 per cent compared to a growth of 2.8 per cent a year ago.
Infrastructure/construction goods reported a growth of 6.3 per cent in May 2025, down from a 7.6 per cent expansion in the year-ago period.
The data also showed that the output of primary goods contracted by 1.9 per cent in May 2025 against 7.3 per cent growth a year earlier.
The expansion in the intermediate goods segment was 3.5 per cent in the month under review against 3.5 per cent a year ago.
