Industrial production growth drops to 3-month low of 4.8% in January

Industrial production for January

• Industrial output growth eased to 6.3 percent in January
• Manufacturing PMI hit a four-month high of 56.9 in February
• GDP growth for Q4 estimated at 7.6 percent

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India’s industrial production growth moderated to a three-month low in January, falling to 4.8 percent from 7.8 percent in December, data released by the government on March 2 shows.

The cooling follows a sharp year-end acceleration even as overall momentum in the sector remains firm.

Factory output continued to expand at a healthy pace compared with much of FY25, when industrial activity slowed significantly amid uneven demand conditions and base effects, data shows.

The latest reading follows a strong rebound in the final months of 2025. Industrial output growth climbed to 7.2 percent in November and to 8 percent the next month, marking the fastest expansion in nearly a year.

January’s moderation reflects return to normalcy rather than a reversal of trend, expert said.

A look at the longer trajectory highlights the volatility industrial activity witnessed over the past year.

Growth weakened sharply through early FY26, falling to 2.57 percent in April, 1.87 percent in May and touching a low of 1.52 percent in June. The recovery began in the second half of the year, with output gradually strengthening from 4.27 percent in July to 4.63 percent in September before dipping briefly to 0.53 percent in October.

India’s manufacturing activity picked up to a four-month high of 56.9 in February, signalling improving industrial momentum in the coming months.

Manufacturing emerged as a key bright spot in the latest GDP numbers. The sector expanded 13.3 percent year-on-year in Q3, accelerating from 13.2 percent growth in the previous quarter.

The latest numbers indicate that the momentum is likely to slow down slightly in the fourth quarter. The government is estimating growth at 7.6 percent in the fourth quarter of the fiscal, indicating only a slight easing in the Jan-March period compared with 7.8 percent growth projected for Q3.

The new GDP numbers are based on 2022-23 base. IIP is due for revision on May 27.