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Index of Industrial Production (IIP)
Context
India’s Index of Industrial Production (IIP) growth slowed sharply to 2.9% in February 2025, marking the lowest expansion in six months. The slowdown was primarily driven by weaker performance in manufacturing and mining sectors. This data is crucial as it reflects the health of core industries and overall economic momentum.
Key Highlights
- Headline IIP Growth Slows: Industrial output grew by only 2.9% in February 2025, compared to 5.2% (revised) in January 2025. This is the lowest growth since August 2024, when IIP had registered zero growth.
- Sectoral Performance
- Manufacturing (77.6% weight in IIP): Grew by 9%, down from 5.8% in January.
- Mining (14.4% weight): Slowed to 6%, from 5.6%.
- Electricity (7.9% weight): Growth moderated to 6%, from 4.4%.
- Use-Based Classification Insights
- Consumer Durables: Grew by 8%, lowest in 15 months—indicating weak rural and semi-urban demand.
- Consumer Non-Durables: Contracted by -2.1%, third consecutive month of decline.
- Capital Goods: Strong growth of 2%, indicating continued investment momentum.
- Infrastructure/Construction Goods: Grew by 6%, showing steady construction sector activity.
- Primary Goods: Slowed to 8%, from 5.5% in January.
- Intermediate Goods: Slowed to 5%, from 5.3%—suggesting weaker production pipeline.
- What Does This Data Indicate?
- Uneven Growth: Capital and infra goods are holding up, but consumption-related sectors (durables, non-durables) are struggling.
- Volatile Momentum: Experts see a risk of stagnation in industrial recovery, especially with global headwinds and domestic consumption fatigue.
- Policy Relevance: Slowing industrial output may influence monetary and fiscal policy choices, especially as GDP growth targets remain ambitious.
Fact Box:About the Index of Industrial Production (IIP)
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