India’s industrial output grew 4% year-on-year in September 2025, maintaining August’s pace, though underlying momentum was mixed. Manufacturing, which rose 4.8%, drove growth, while mining contracted 0.4% and electricity generation increased 3.1%. Core sector growth slowed to 3%, weighed down by declines in refinery products, natural gas, and crude oil, despite strong steel and cement output. Consumer durables and infrastructure goods showed robust expansion, but non-durables fell.
Although festive demand, GST rate cuts, and pent-up consumption boosted short-term momentum, analysts cautioned that sustaining growth beyond the festive period could be challenging amid subdued domestic demand and persistent global headwinds.
India’s Index of Industrial Production (IIP) registered a year-on-year growth of 4% in September 2025, maintaining the same pace as August’s quick estimate. The IIP stood at 152.8 compared to 146.9 in September 2024, reflecting continued momentum in industrial output.
According to data from the Ministry of Commerce and Industry, growth in the eight core industries slowed to 3% in September from 6.5% in August, as declines in refinery products, natural gas, and crude oil output offset the gains recorded in steel and cement production. Notably, Steel output jumped 14.1% and cement rose 5.3%, driven by strong infrastructure activity. However, refinery production fell 3.7%, natural gas declined 3.8%, and crude oil dipped 1.3%, reflecting persistent weakness across India’s energy-producing sectors.
Manufacturing leads growth
Manufacturing remained the primary growth driver, with output rising 4.8% compared to about 4% a year earlier. Strong performances were recorded across several core industries.
According to analysts, the robust growth in manufacturing was underpinned by double-digit expansion in key industries, including basic metals, electrical equipment, computer and electronic products, motor vehicles, and wood products.
Production of basic metals jumped 12.3%, electrical equipment soared 28.7%, and motor vehicles, trailers and semi-trailers rose 14.6% over the same month last year.
Electricity generation also showed improvement, rising 3.1% in September 2025 against a modest 0.5% growth in the year-ago period, indicating increased energy demand in both industrial and household sectors. Meanwhile, the National Statistics Office (NSO) revised the IIP growth for August 2025 slightly upward to 4.1% from its provisional estimate of 4%.
However, on a half-yearly basis, industrial growth has moderated. During April–September (H1) FY26, overall industrial production expanded by 3%, lower than the 4.1% growth recorded during the corresponding period of FY25.
Use-based categories show mixed performance
Manufacturing, accounting for nearly 78% of the IIP — remained the key driver of growth. The sector expanded 4.8% year-on-year in September, improving from 3.8% in August and 3.9% in the same month last year.
Mining output, impacted by heavy rains in parts of the country, declined by 0.4% year-on-year in September, reversing a strong 6.6% expansion in August and a marginal 0.2% increase recorded in September 2024.
Performance across use-based categories showed mixed trends. Production of capital goods, intermediate goods, infrastructure/construction goods, and consumer durables recorded sequential improvements, while output of primary goods slowed and consumer non-durables declined.
Capital goods output increased 4.7% in September compared to 4.5% in August, while intermediate goods rose 5.3%, slightly higher than 5.2% previously. Infrastructure and construction goods maintained strong growth at 10.5%, up marginally from 10.4% in the prior month.
Consumer durables reported the sharpest gain, surging 10.2% year-on-year versus 3.5% in August. In contrast, primary goods output grew just 1.4%, down from 5.4% in the previous month, while consumer non-durables contracted by 2.9%, following a 6.4% decline in August.
Industrial recovery uneven amid global and domestic headwinds
According to analysts, India’s industrial growth in September 2025 reflected a fragile and uneven recovery, highlighting persistent challenges amid subdued domestic demand, global economic uncertainties, and sector-specific constraints.
Industrial performance during FY26 has remained volatile — slowing in the first quarter (April–June) before picking up momentum from July onwards. The latest Index of Industrial Production (IIP) data suggests that while some sectors are regaining strength, overall recovery remains patchy and dependent on consumption dynamics and external factors.
Growth in the core infrastructure industries, which make up over two-fifths of the country’s industrial output, eased to a three-month low in September, with production up 3% year-on-year, according to provisional data.
Analysts noted that despite the moderation in industrial growth, a mix of GST rate rationalisation, pent-up demand, and an early festive season has boosted consumption during September–October 2025. They added that GST reductions for the FMCG sector are expected to show a more visible impact in October and November, as dealers earlier struggled to sell products with older price labels. These factors are also likely to support manufacturing activity in the coming months. However, the analysts cautioned that while GST cuts may help sustain demand for everyday and lower-value goods, demand for high-value or big-ticket items may weaken post-festive season.
Read more:
Quick estimate of index of industrial production and use-based index for the month of September 2025
India’s industrial production slows to 4% in September
India’s Industrial Development Report 2024-25
FAQs:
1. What was India’s industrial growth rate in September 2025?
India’s Index of Industrial Production (IIP) grew 4% year-on-year in September 2025, maintaining the same pace as August’s quick estimate. The IIP stood at 152.8, up from 146.9 a year earlier, reflecting steady industrial momentum despite global and domestic challenges.
2. Which sector contributed most to the IIP growth?
The manufacturing sector was the primary driver, expanding 4.8% in September. Strong output in basic metals (12.3%), electrical equipment (28.7%), and motor vehicles (14.6%) supported the growth, underlining broad-based strength in industrial and consumer-linked production.
3. Why did growth in the core industries slow during the month?
Growth in the eight core industries eased to 3% in September from 6.5% in August due to a contraction in refinery products (-3.7%), natural gas (-3.8%), and crude oil (-1.3%), which offset gains in steel (+14.1%) and cement (+5.3%).
4. How did different use-based categories perform in September 2025?
Performance was mixed. Growth improved for capital goods (4.7%), intermediate goods (5.3%), infrastructure goods (10.5%), and consumer durables (10.2%). However, primary goods growth slowed to 1.4%, and consumer non-durables declined 2.9%, reflecting weaker rural and low-income consumption.
5. What are analysts’ expectations for industrial growth in the coming months?
Analysts expect manufacturing activity to remain supported in October by GST rate cuts, pent-up demand, and festive spending. However, they caution that sustaining growth beyond the festive period may be difficult due to subdued domestic demand, global uncertainties, and weakness in energy output.
