India’s Industrial Output Hits Five-Year Low in FY 2025-26

Industrial Growth Moderates Sharply

India’s Industrial Output Hits Five-Year Low in FY 2025-26: India’s industrial growth decelerated to 4% in September 2025, marking a three-month low, according to data from the Ministry of Statistics and Programme Implementation (MoSPI). The first half of FY 2025-26 recorded a modest 3% expansion, making it the weakest performance in five years.

Static GK fact: The Index of Industrial Production (IIP) is compiled by the Central Statistics Office (CSO) under MoSPI to measure changes in the volume of industrial output.

Weakest First-Half Growth Since 2020-21

Between April and September 2025, IIP growth slowed to 3%, compared to 4.1% during the same period last year. This marks the lowest first-half industrial growth since FY 2020-21, the year impacted by the pandemic. Earlier years had shown stronger rebounds — 24% in FY 2021-22, 7% in FY 2022-23, and 6.3% in FY 2023-24.

Economists note that the current trend signals a broad-based slowdown, particularly in core sectors such as mining, primary goods, and consumer non-durables.

Mining and Primary Goods Drag Output

The mining sector witnessed a marginal contraction of 0.45% in September 2025, reversing from a 6.6% growth in August. Similarly, primary goods grew only 1.4%, compared to 5.4% a month earlier. These declines underline supply-side challenges such as weak raw material availability and weather-related disruptions.

Static GK Tip: The core industries contributing over 40% to the IIP include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity.

Consumer Non-Durables Continue to Contract

The consumer non-durables segment fell 2.9% in September, after a deeper 6.4% decline in August. A year ago, this category grew 2.2%. Analysts suggest that the impact of GST rate cuts will be visible later in the fiscal year as inventories with old pricing are cleared.

According to Madan Sabnavis, Chief Economist at Bank of Baroda, the October–November festive period could bring a short-term rebound as retailers restock goods.

Manufacturing and Durables Offer Temporary Relief

The manufacturing sector offered some respite, expanding 4.8% in September, up from 3.8% in August. The consumer durables category showed strong growth of 10.2%, driven by festive demand and improved urban sentiment.

However, sustained recovery in industrial production will depend on easing supply bottlenecks, steady rural demand, and the transmission of policy benefits from the GST Council’s decisions earlier in 2025.

Static GK fact: The manufacturing sector contributes nearly 77% of India’s total IIP weight, making it the key driver of industrial performance.

Outlook for the Rest of FY 2025-26

While the festive months could temporarily lift output, the overall industrial trend remains fragile. Economists emphasize the need for infrastructure push, improved credit flow to MSMEs, and faster policy execution to sustain momentum in the coming quarters.

Static Usthadian Current Affairs Table

India’s Industrial Output Hits Five-Year Low in FY 2025-26: