India’s industrial sector is expected to grow at a slower pace of 6.2% in FY25 compared to 9.5% in FY24, as per advance estimates, primarily due to the base effect and a subdued manufacturing performance in the first half, according to Bank of Baroda report.
However, signs of recovery are emerging for the second half, supported by improved GST collections, steady Purchasing Managers’ Indices (PMIs), and increased capital expenditure.
The upcoming Union Budget is anticipated to introduce measures aimed at boosting manufacturing growth and accelerating the investment cycle, signalling optimism for the sector’s revival. India’s industrial production surged to a six-month high in November 2024, registering a robust 5.2% growth compared to 3.7% in October, according to the Index of Industrial Production (IIP) data.
Industrial Production: Other Details!
This improvement was driven by broad-based expansion across the manufacturing, mining, and electricity sectors, signaling a positive outlook for the industrial sector in the coming months. The manufacturing sector led the charge with an impressive 5.8% growth, the highest in eight months, as 15 out of 23 sub-sectors, including furniture, electronics, and machinery equipment, recorded significant year-on-year improvements.
Mining output grew by 1.9% (up from 0.9% in October), and electricity output expanded by 4.4% (up from 2%), reflecting a solid recovery across the board.
Notably, infrastructure and capital goods output recorded remarkable growth at 10% and 9%, respectively, in November. Consumer durable goods output also soared to a 13-month high of 13.1%, largely due to a festive season boost. However, growth in FMCG goods slowed to 0.6%, indicating some demand challenges in this segment.
While November’s data reflects strong momentum, growth for the fiscal year to date (FYTD) has moderated. IIP growth slowed to 4.1% compared to 6.5% in the same period last year, with manufacturing, mining, and electricity sectors all registering lower growth rates.
Looking ahead, attention will shift to the upcoming Union Budget and RBI policy announcements, both expected to be growth-focused.
