India’s industrial output showed a sharp slowdown in October 2025, growing just 0.4%, the lowest in 14 months. This growth missed estimates of 3.1% and fell significantly from September’s 4% increase. The slowdown highlights the challenges facing the manufacturing and industrial sectors despite strong domestic consumption.
The Index of Industrial Production (IIP) measures short-term changes in the production of industrial goods, including manufacturing, mining, and electricity. In October, manufacturing output rose only 1.8%, compared to 4.8% in September. Mining and electricity production declined by 1.8% and 6.9% respectively, indicating uneven sectoral performance. Together, these three sectors contributed to the overall slowdown in industrial growth.
Experts suggest that fewer working days in October due to festivals like Dussehra and Deepawali affected production. The Ministry of Statistics & Programme Implementation also noted that these holidays likely contributed to the weak output. October was a key month for the economy, as the government rolled out GST reductions to boost domestic consumption and offset the impact of a 50% U.S. tariff on Indian goods.
Despite the slowdown in industrial production, consumption remained strong across major categories. Analysts believe that rural incomes, low inflation, reduced interest rates, and tax relief will continue to support healthy domestic demand. According to Dipti Deshpande, principal economist at Crisil, sturdy consumption will partially offset weaker export demand in the last quarter of the year.
The government, however, may moderate capital expenditure in the second half of the fiscal year to meet its fiscal deficit targets, as tax collections remain subdued. This cautious approach could affect industrial growth in the coming months.
Eight core industries, including steel, cement, electricity, and fertilizer, account for 40% of the IIP’s weight. Their performance largely determines overall industrial growth, and weaker output in electricity and mining sectors contributed heavily to the October slowdown.
Overall, while domestic consumption provides some relief, India’s industrial sector faces headwinds due to reduced working days, export pressures, and sector-specific challenges. Policymakers may need to adopt targeted measures to strengthen manufacturing and mining output in the coming months.
