New Delhi: India’s industrial growth nearly stalled in October, with the Index of Industrial Production (IIP) rising just 0.4% compared with 4% in September, reflecting a sharp loss of momentum in factory activity. The Ministry of Statistics attributed the slowdown largely to the heavy festival calendar — Dussehra, Diwali and Chhat — which reduced working days for manufacturing units across the country.
The weakness was broad-based on the sectoral front. While manufacturing, which accounts for the bulk of the index, managed to grow 1.8%, mining output contracted 1.8% and electricity generation slumped 6.9%. The fall in power generation is being linked to lower-than-usual electricity demand during the month, driven by extended monsoon conditions and milder temperatures in several states — an indication that weather conditions continue to play a role in short-term output dynamics.
The headline IIP index stood at 150.9 in October, barely higher than 150.3 I the same month a year earlier, underscoring the lack of meaningful expansion. The indices for mining, manufacturing and electricity came in at 126.2, 151.1 and 193.4, respectively.
Some Resilience
Despite the muted aggregate picture, some areas of manufacturing showed resilience. Nine of the 23 manufacturing industry groups posted year-on-year growth, led by basic metals (6.6%), coke and refined petroleum products (6.2%), and motor vehicles, trailers and semi-trailers (5.8%).
The drivers within these segments — mild steel coils and sheets, alloy steel flat products, diesel and petrol, and automotive components and vehicles — indicate relatively strong momentum in construction-linked and transportation-linked sectors even as consumer-facing categories struggled. This divergence becomes more evident in the use-based analysis. Infrastructure and construction goods surged 7.1%, followed by capital goods (2.4%) and intermediate goods (0.9%), suggesting that investment-led demand continues to support industrial activity.
In contrast, primary goods (-0.6%), consumer durables (-0.5%) and especially consumer non-durables (-4.4%) dragged the index down. The contraction in consumer non-durables — typically a barometer for rural consumption — could signal persistent demand weakness in price-sensitive categories despite the festive season.
The Central Statistics Office noted that September figures have undergone final revision based on updated factory returns, and that the quick estimates for October were compiled with a weighted response rate of 87.99%.