India’s industrial production, based on the Index of Industrial Production (IIP), accelerated to a two-year high of 6.7% in November 2025, aided by strong growth in manufacturing and mining, with factory
activity benefiting from a pile-up of orders following cuts in goods and services tax (GST) rates, official data released on Monday showed.
Factory output, measured by the IIP, had grown 5% in November 2024. The last higher growth was recorded in November 2023, when IIP had surged 11.9%.
Ahead of the festive season, GST rates were reduced on a range of consumer goods with effect from September 22, 2025, a move aimed at boosting demand. The rate cuts encouraged manufacturers to front-load production to take advantage of lower taxes, leading to a spike in order flows during the month.
Commenting on the outlook, Aditi Nayar, chief economist and head (research & outreach) at ICRA, said, “The impact of the US tariffs and penalties is likely to reflect across some of the manufacturing segments, partly offsetting the positive impact of the GST rate rejig.”
However, she added that there were some positive signals emerging on the energy front. “The electricity demand expanded in December 2025 after a gap of two months, which should boost power generation in the month, auguring well for IIP growth in the month,” Nayar said.
Looking ahead, she cautioned that the pace of growth may moderate. “We expect the IIP growth to ease to 3.5-5.0% in December 2025, as the base effect normalises and the benefit from restocking wanes,” she added.
The National Statistics Office (NSO) also revised industrial production growth for October 2025 marginally upwards to 0.5%, from the provisional estimate of 0.4% released earlier.
Sector-wise data showed that manufacturing output rose 8% in November 2025, compared with a 5.5% expansion in the same month last year. Mining activity grew 5.4%, rebounding sharply from 1.9% growth a year ago, helped by the end of the monsoon season and stronger output of metallic minerals such as iron ore.
Power generation, however, remained a weak spot, contracting 1.5% in November 2025, against a 4.4% expansion in the year-ago period.
For the April-November period of FY26, industrial production growth slowed to 3.3%, from 4.1% in the corresponding period of the previous year.
In a statement, the NSO said, “Driven by 8 per cent growth in manufacturing sector, IIP recorded a 6.7 per cent year-on-year growth in November 2025. The growth is led by Manufacture of basic metals and fabricated metal products, pharmaceuticals and motor vehicles.” It also noted that the rebound in mining was supported by stronger production of metallic minerals after the monsoon.
Within manufacturing, 20 out of 23 industry groups recorded positive year-on-year growth during the month.
Use-based classification data pointed to broad-based improvement. Capital goods output rose 10.4% in November 2025, compared with 8.9% a year ago, indicating a pickup in investment activity. Consumer durables production grew 10.3%, though slower than the 14.1% expansion seen in November 2024, while consumer non-durables output jumped 7.3%, up sharply from 0.6% a year earlier.
Infrastructure and construction goods recorded a strong 12.1% expansion, compared with 8% growth in the year-ago month. Output of primary goods grew 2%, slightly lower than the 2.7% growth recorded last year, while intermediate goods production expanded 7.3%, up from 4.8% in November 2024.
Overall, November’s data point to a strong but possibly temporary boost to industrial activity, with analysts expecting growth to cool in the coming months as festive demand fades and external headwinds reassert themselves.
