Manufacturing's Ascent
The manufacturing sector played a pivotal role, achieving a 5.4% growth in July 2025, a notable increase from the 4.7% the previous year. This performance
was fueled by construction inputs and consumer durables. While the IIP growth reached 3.9% in March 2025, this recent surge marks significant progress, highlighting the sector's resilience and adaptability.
Sectoral Contrasts
While manufacturing excelled, mining production dipped by 7.2%, contrasting with a 3.8% rise a year earlier. Power production also saw a modest increase of just 0.6%, a notable decrease from the 7.9% the prior year. These variations underscore the need for a balanced economic approach and focused interventions in lagging sectors for sustainable progress.
Overall IIP Trend
The Index of Industrial Production (IIP) revealed that for the April-July period of FY26, India’s total industrial production expanded by 2.3%, compared to 5.4% during the same period last year. The NSO data maintained the growth rate at 1.5%, in line with the provisional estimates from the previous month. This signifies a slower overall rate.
Future Projections
ICRA's chief economist, Aditi Nayar, noted that an improved monetary easing coupled with GST rationalization could support consumer spending. However, potential discretionary spending might be postponed until the lower tax rates are implemented. Disruptive monsoon rainfall might contain IIP growth below 3% in August 2025, according to Nayar.
Industry Specifics
14 out of 23 industry groups recorded positive growth. Capital goods segment slowed to 5%, consumer durables rose to 7.7%. Consumer non-durables output saw a modest 0.5% increase, contrasting with a 4.2% contraction the previous year. Infrastructure and construction surged by 11.9%. Primary goods output contracted by 1.7%, while intermediate goods expanded by 5.8%.
