“India’s Industrial Production Growth Accelerates to 3% in March 2025 Despite Sectoral Slowdown”
India’s industrial production growth witnessed a marginal acceleration in March 2025, rising to 3% compared to 2.7% in February, according to data released by the Ministry of Statistics & Programme Implementation (MoSPI). However, this uptick comes with a broader context of slowdown, as the year-on-year comparison shows a decline from 5.5% growth registered in March 2024. This deceleration is primarily attributed to weaker performances in key sectors such as manufacturing, mining, and electricity.
The manufacturing sector, which holds the largest weight in the Index of Industrial Production (IIP), recorded a growth of 3% in March 2025. While this was slightly better than the previous month, it still reflects subdued momentum when compared to the same month last year. Mining output saw a notable slowdown, registering only 0.4% growth in March compared to 1.3% in the previous year. The electricity sector also experienced a deceleration in output, with a growth rate of 6.3% versus 8.6% during the same period last year.
On a broader scale, the overall IIP for the fiscal year 2024-25 grew at 4%, which is significantly lower than the 5.9% growth recorded in fiscal 2023-24. This dip indicates a cooling in industrial activity, potentially influenced by both domestic and global economic conditions.
Adding to the cautious outlook, a recent report by the Union Bank of India has warned of mounting pressure on industrial production growth due to rising global macroeconomic uncertainty. The report highlighted that the month of April saw an increase in global trade tensions, triggered by reciprocal tariff hikes imposed by the United States. Such developments have led to a wave of uncertainty that may impact India’s industrial output in the coming months.
The report further noted that approximately 30% to 35% of the IIP weight is linked to export-oriented industries, which are expected to face headwinds until there is greater clarity on global trade dynamics. This uncertainty could negatively affect business sentiment, causing delays in investment decisions and a slowdown in consumption, particularly in discretionary goods.
As global and domestic challenges converge, India’s industrial production trajectory remains cautiously optimistic but faces significant risks in the near term. The slight growth in March offers a temporary relief but underlines the need for strategic policy support and stability in the global economic environment.
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