India's industrial production witnessed a notable acceleration in July 2025, climbing to 3.5% compared to a revised 1.5% in June 2025. This marks a four-month high, with the last similar growth rate of 3.9% recorded in March 2025. The expansion is largely attributed to the robust performance of the manufacturing sector.

The official data, released by the National Statistics Office (NSO) on Thursday, indicates a significant upturn in manufacturing output, which rose to 5.4% in July 2025, up from 4.7% in the same month the previous year. This positive momentum in manufacturing has been a key driver in pushing the overall industrial production upwards. Within the manufacturing sector, 14 out of 23 industry groups at the NIC 2-digit level, demonstrated positive growth in July 2025 compared to July 2024. The top three sectors contributing positively to this growth were "Manufacture of basic metals" (12.7%), "Manufacture of electrical equipment" (15.9%), and "Manufacture of other non-metallic mineral products" (9.5%). Specifically, within the "Manufacture of basic metals" group, items like "MS slabs," "HR coils and sheets of mild steel," and "Flat products of Alloy Steel" showed significant growth contributions. Similarly, "Electric heaters" were a key contributor within the "Manufacture of electrical equipment" industry group.

However, not all sectors experienced growth. Mining production contracted sharply by 7.2% in July 2025, a stark contrast to the 3.8% growth recorded in the same period last year. The electricity sector also saw a marginal increase of just 0.6% in July 2025, significantly lower than the 7.9% growth in July 2024. The indices of industrial production for the Mining, Manufacturing and Electricity sectors for the month of July 2025 stand at 107.7, 156.9 and 221.5 respectively.

Looking at broader economic indicators, consumer durables output, including items like cars and phones, surged by 7.7% in July, a notable increase from the 2.8% growth in June. Consumer non-durables, such as food items and toiletries, also showed positive growth, increasing by 0.5% after a decline of 0.9% in June. Furthermore, capital goods production increased by 5% in July, compared to 3% growth in June, suggesting a potential improvement in investment activity.

Despite the positive figures for July, the overall industrial output for the April-July period of FY26 grew by 2.3%, which is a slowdown compared to the 5.4% increase recorded during the same period a year ago. This indicates that while the industrial sector is recovering, it is still facing some challenges in maintaining the growth momentum achieved in the previous year. The IIP growth rate for the month of July 2025 is 3.5 percent which was 1.5 percent (Quick Estimate) in the month of June 2025. The Quick Estimates of IIP stands at 155.0 against 149.8 in July 2024.