Industrial Output Growth Slows to 10-Month Low of 1.5% in June

India's industrial production growth slowed to a 10-month low of 1.5% in June 2025 due to poor performance of mining and power sectors, which were impacted by excess rains especially in second half of the month, according to official data released on Monday.

The factory output, measured in terms of the Index of Industrial Production (IIP), had expanded by 4.9% in June 2024.

The National Statistics Office (NSO) also revised upwards the pace of industrial production growth for May to 1.9% from the earlier estimate of 1.2% released last month.

The previous low pace of growth was recorded in August 2024 when the output growth stayed flat.

"Excess rains in the second half of June 2025 are likely to have weighed on mining output, while also leading to a contraction in electricity generation, although the extent of the same narrowed compared to the previous month," said Aditi Nayar, Chief Economist, Head - Research & Outreach, ICRA, in a statement.

The NSO data showed that the manufacturing sector's output growth rose marginally to 3.9% in June 2025 from 3.5% in the year-ago month.

Mining production contracted by 8.7% against a growth of 10.3% recorded a year ago.

Power production declined by 2.6% in June 2025 against 8.6% growth in the year-ago period.

During the April-June quarter of FY26, industrial production growth slowed from 5.4% a year ago to 2%, the lowest in past 11 quarters.

Nayar stated, "In quarterly terms, the IIP growth eased to an 11-quarter low of 2.0% in Q1 FY2026 from 4.0% in Q4 FY2025, with excess rains in parts of the quarter dampening electricity generation and mining output." Within the manufacturing sector, 15 out of 23 industry groups have recorded a positive year-on-year growth in June 2025.

As per use-based classification, the capital goods segment growth decelerated to 3.5% in June 2025 from 3.6% in the year-ago period.

Consumer durables (or white goods production) growth slowed to 2.9% during the reporting month against a growth of 8.8% in June 2024.

In June 2025, consumer non-durables output contracted 0.4% compared to a contraction of one per cent a year ago.

Infrastructure/construction reported a growth of 7.2% in June 2025, down from a 8.2% expansion in the year-ago period.

The data also showed that the output of primary goods contracted by 3% in June 2025 against 6.3% growth a year earlier.

The expansion in the intermediate goods segment was 5.5% in the month under review against 3.2% a year ago.