India’s Industrial Output Growth Hits Four-Month High of 3.5% in July

The growth in India’s Index of Industrial Production hit a four-month high of 3.5% in July 2025, compared with 1.5% in June. The index was at 155.0, up from 153.3 in June 2025, reflecting broad-based improvements in manufacturing and select categories of use-based goods.

The sectoral performance remained uneven. Mining contracted by 7.2%, continuing a weak trend, while electricity generation edged up 0.6%. Manufacturing, which holds the highest weight in the index, expanded 5.4%.

The rise in industrial output stood in contrast to the core sector industries, which account for 40% of the IIP. Core sector growth slowed to 2% in July from 2.2% in June. Within this basket, steel and cement recorded strong momentum. Steel production surged 12.8%, the fastest in 21 months, while cement output rose 11.7%, a four-month high. Electricity production within the core sector registered a marginal 0.5% increase.

A closer look at the manufacturing segment showed that 14 of 23 industry groups at the National Industrial Classification recorded year-on-year growth in July. The largest contributions came from basic metals, electrical equipment, and other non-metallic mineral products. Basic metals expanded 12.7%, supported by growth in mild steel slabs, hot-rolled coils and sheets, and flat products of alloy steel. Electrical equipment output rose 15.9%, led by items such as electric heaters, circuit protection apparatus including switchgear and breakers, and small transformers. Other non-metallic mineral products grew 9.5%, with cement, cement clinkers, and marble slabs as key contributors.

From a use-based classification, the July data showed divergent trends across categories. Primary goods output contracted 1.7%, reflecting weakness in mining. By contrast, capital goods rose 5.0%, intermediate goods climbed 5.8%, and infrastructure and construction goods surged 11.9%. Consumer goods displayed mixed outcomes, with consumer durables up 7.7% and non-durables marginally higher at 0.5%. The leading drivers for IIP growth were infrastructure and construction goods, intermediate goods, and consumer durables.