India’s industrial production declined to an eight-month low of 2.7 percent in April compared with a revised 3.9 percent in the previous month, as electricity and mining dragged down growth, according to data released by the government on May 28.
A high base and uncertainty fuelled by Trump tariffs had pushed India’s core sector growth down to an eight-month low of 0.5 percent in April from 4.6 percent in the previous month.
The decline was reflected in industrial activity trends as well.
Core sector contributes 40 percent to the index of industrial production and captures the growth in infrastructure industries.
"While the IIP growth expectedly eased to 2.7% in April 2025 from the upward revised 3.9% in March 2025, the extent of the dip was much lower than expectations given the slump in the core sector growth, suggesting that the non-core portion of the IIP witnessed a relatively healthier growth in the month," said Aditi Nayar, chief economist, Icra.
The decline was broad-based, with mining contracting for the first time in eight months. Mining growth was 0.2 percent lower from the previous year and 17 percent lower than the previous month.
Electricity performance was no better, as production fell to 1.1 percent compared with 7.5 percent in March.
Manufacturing was on a relatively better footing as growth dipped to 3.4 percent from 3.9 percent the previous month.
"Manufacturing sector growth held up relatively well at 3.4% supporting the overall IIP growth, while a contraction in the mining output and moderation in electricity output exerted downward pressures," said Rajani Sinha, chief economist, CareEdge.
Silver lining
Experts indicate that there was silver lining in performance of use-based industries as some of the sectors performed better.
Capital goods sector grew at the fastest pace in nearly two years, growing 20.3 percent helped by a low base and consumer durable growth held steady at 6.4 percent, easing from 6.9 percent in the previous month.
"The infrastructure goods output growth declined to a seven-month low of 4.0 percent yoy in April 2025. The consumer non-durables are still in contractionary phase, with the output declining by 1.7 percent in April 2025 for the third straight month. The positive spillover effects of significant ebbing of high food inflation along with the monetary easing in February and April 2025, would be felt with a lag in FY26, in Ind-Ra’s view," said Paras Jasrai, associate director, India Ratings and Research.
Cloudy ahead?
Experts are not too enthusiastic about coming month as well, with an early monsoon playing a dampener for power generation.
"The unseasonal rains could also impact the construction goods output. This along with an unfavourable base effect (May 2024: 6.3 percent yoy) would keep the factory output growth under 2 percent yoy in May 2025, in Ind-Ra’s view," said Jasrai.
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