India’s industrial production increased by 1.5% in June 2025 compared to the same month last year, official data showed. This modest rise, up from May’s 1.2% growth, marks the slowest pace in ten months and fell short of market expectations of 2% growth. The overall increase was largely offset by significant declines in mining and electricity production, with mining contracting by 8.7% and electricity output slipping by 2.6%. Experts noted that factors like a drop in coal prices and subdued export demand contributed to the weak performance in these sectors.
Despite the overall slowdown, the Index of Industrial Production (IIP) for June reached 153.3, a small improvement from 151.0 recorded in June 2024. The data reflect a mixed picture, with some sectors showing robust activity while others continue to struggle.
Manufacturing Drives Industrial Growth
Manufacturing was the clear bright spot in June, growing 3.9% year-on-year and playing a crucial role in supporting overall industrial output. Out of 23 industry groups in manufacturing, 15 reported positive growth. Notably, the production of basic metals surged by 9.6%, coke and refined petroleum rose by 4.2%, and fabricated metal products (except machinery and equipment) saw an impressive 15.2% jump. Items like mild steel slabs, diesel, and stainless steel utensils were among the top performers.
The strength in manufacturing was also reflected in a solid performance of infrastructure and construction goods, which rose by 7.2%. Intermediate goods grew by 5.5% and capital goods by 3.5%. However, there were declines in primary goods (down 3.0%) and consumer non-durables (down 0.4%), even as consumer durables posted a 2.9% increase.
What Lies Ahead
While June’s industrial growth was lower than expected, the ongoing momentum in manufacturing provides positive signals for recovery in coming months. Analysts say that broad-based gains across various manufacturing subsectors indicate underlying resilience, even as mining and electricity sectors face short-term challenges. Official projections suggest India’s industrial production could reach higher rates as manufacturing demand remains strong, especially if global and domestic factors turn favorable.