India's industrial production witnessed a growth of 4.0% in August 2025, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). This marks an acceleration from the 3.5% growth reported in July 2025. However, the growth rate fell slightly short of economists' expectations, who had projected a 5% increase.

Sectoral Performance

The growth in industrial output was primarily propelled by the mining sector, which recorded a 6.0% increase in output. This rebound is significant, considering the contraction experienced in July due to heavy monsoon rains. Manufacturing, a key component of industrial production, also contributed positively with a 3.8% rise. The electricity sector experienced a 4.1% increase, recovering from a slowdown in July.

Within the manufacturing sector, certain industries stood out as key drivers of growth. "Basic metals" manufacturing demonstrated a strong growth of 12.2%, driven by MS slabs, HR coils, and steel pipes. The "motor vehicles, trailers, and semi-trailers" segment also performed well, with a 9.8% increase supported by auto components and commercial vehicles. Additionally, the "coke and refined petroleum products" industry grew by 5.4%, boosted by higher production of diesel, petrol, and LPG.

Use-Based Classification

An analysis based on the use of goods reveals interesting trends within the industrial sector. Infrastructure and construction goods exhibited the highest growth at 10.6%, reflecting substantial public investment in infrastructure projects such as highways, railways, and ports. Primary goods increased by 5.2%, intermediate goods by 5%, and capital goods by 4.4%, indicating sustained investment activity. Consumer durables registered a 3.5% rise. However, consumer non-durables experienced a notable contraction of 6.3%, suggesting a weakening in demand for fast-moving consumer goods.

Overall Performance and Outlook

The overall Index of Industrial Production (IIP) for August 2025 stood at 151.7, compared to 145.8 in the same month last year. While the August figures indicate a positive trajectory, the industrial production growth for the April-August period of FY26 was 2.8%, lower than the 4.3% growth recorded in the corresponding period of the previous year.

Aditi Nayar, Chief Economist at Icra, noted that the IIP growth eased to 4% in August, despite a favorable base effect. The slowdown was primarily attributed to a sharp decline in manufacturing growth.

The next release of IIP data, pertaining to September 2025, is scheduled for October 28, 2025. These figures will provide further insight into the evolving trends and momentum of India's industrial sector.