IIP grows 3% as electricity, manufacturing output surge

March 2025 IIP data shows 3% growth, with electricity and manufacturing sectors leading, but lower than expected.

The Index of Industrial Production (IIP) grew 3% as electricity and manufacturing sector production surged in March 2025, according to data from the Ministry of Commerce and Industry. The number was lower than the Reuters estimate of 3.3%.

Electricity production surged 2.7 percentage points to 6.3% in the month under review as summers have increased power demand. Manufacturing sector output grew at a quicker 3% in March 2025, as against 2.7% in the previous month. Mining and quarrying sector growth slowed to 0.4% in March as against 1.6% in February.

In the use-based classification, consumer durables and construction registered the sharpest increase in growth, coming at 6.6% and 8.8% respectively. These sectors grew at 3.7% and 6.8% respectively in February.

The other sectors where output grew at a faster pace than February were primary sectors and intermediate goods, which grew at 3.1% and 2.3% respectively.  Consumer non-durables output continued to contract for the second quarter, shrinking a steeper 4.7% in the month under review. Growth in capital goods output increased at a slower 2.4% in March, compared with 8.1% in the month before. 

On a year-on-year basis, IIP growth came in at 4%, making it the slowest in four years. Growth in output of all three sectors by economic activity slowed in the year-ended March 2025. In use-based classification, all sectors registered a slower growth. Consumer durables output increased 8% in 2024-25 from 3% in the previous year, but  this was offset by consumer non-durables where production shrank for the first time in four years, declining 1.6%.

Industrial growth though has domestic tailwinds will also face global headwinds, say experts.