India’s industrial growth rose to 3 percent in March from 2.7 percent in the previous month, data released by the government on April 28 said.
The growth in the Index of Industrial Production (IIP) follows a slight uptick in infrastructure industries during the month. The core sector, which has a 40 percent weight in the IIP, registered 3.8 percent growth, up from 3.4 percent in February, as steel, cement and electricity generation picked up.
"The IIP growth for March 2025 came in slightly lower than our forecast of 3.3%. It is possible that the lower response rate associated with the preponing of the data release has dampened the estimated growth rate, which may subsequently undergo a relatively larger revision as compared to that seen in the past," said Aditi Nayar, chief economist, Icra.
Among the major industries, manufacturing, which accounts for over three-fourths of the weight in the index, rose to 3 percent in March from 2.8 percent in the previous month.
The electricity sector, owing to start of the summer season, rose faster at 6.3 percent compared with 3.6 percent in the previous month.
In FY25, India’s industrial performance was a disappointing 4 percent compared with 5.9 percent in the previous year.
Consumer non-durables, a proxy for urban demand, contracted for better part of the year, even as consumer durables, reflective or rural demand, showed better results.
In March, consumer non-durables witnessed a widening of contraction to 4.8 percent from 1.8 percent in February. Durables performed better, rising to 6.6 percent from 3.8 percent.
Construction goods rose at the fastest pace of 8.8 percent from 6.6 percent in the previous month.
"Looking ahead, while there is some evidence as well as commentary around front-loading in exports to the US, we need to see whether this is driven by redirection away from other geographies or a bump up in output in the ongoing month," Nayar noted.
Manufacturing growth has been muted in FY25. The government expects industry to record just over 4 percent growth compared with 12 percent in the previous fiscal.
India’s economic growth is set to slip further to 6.2 percent, according to the International Monetary Fund, as tariffs and trade tensions weigh heavy on the global economy.
The statistics ministry has reduced the timing of release of IIP data. The series is expected to be released within 30 days of release of data compared with 42 days lag earlier. The data will be released on 28th of every month.
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