Mfg drags IIP growth down to 5-month low of 4.1% in March

PULSE | Mining, factory activity support growth despite slight moderation trend

Agencies New Delhi

India's industrial production growth decelerated to a five-month low of 4.1% in March on account of subdued manufacturing growth and almost flat expansion in the power sector amid the West Asia crisis, according to official data released on Tuesday.

The factory output, measured in terms of the Index of Industrial Production (IIP), expanded by 3.9% in March 2025, an official statement said. The National Statistics Office (NSO) revised the industrial production growth for February 2026 to 5.1% from the provisional estimate of 5.2% released last month. The previous low of IIP growth was recorded at 0.5% expansion in October 2025.

The NSO data further showed that the manufacturing sector's output growth remained subdued at 4.3% in March 2026 compared to 4% in the year-ago month. Mining production growth improved to 5.5% from a meagre growth of 1.2% recorded a year ago. Power generation grew marginally by 0.8% in March against 7.5% expansion in the year-ago period.

In fiscal year 2025-26, the country's industrial production growth remained almost flat at 4.1% compared to 4% a year ago. In the manufacturing sector, 14 out of 23 industry groups recorded a positive growth in March 2026 over March 2025. The top three positive contributors for March 2026 are manufacture of basic metals (8.6%), manufacture of motor vehicles, trailers and semi-trailers (18.1%) and manufacture of machinery and equipment n.e.c. (11.2%).

In the industry group manufacture of basic metals, item groups MS slabs, flat products of alloy steel and HR coils and sheets of mild steel showed significant contribution in growth. As per the use-based classification, the indices stand at 173.3 for primary goods, 156.2 for capital goods, 181.4 for intermediate goods and 229.0 for infrastructure/construction goods for March 2026. Further, the indices for consumer durables and consumer non-durables stand at 146.2 and 150.6, respectively.

The corresponding growth rates of IIP in March 2026 over March 2025 are 2.2% in primary goods, 14.6% in capital goods, 3.3% in intermediate goods, 6.7% in infrastructure/construction goods, 5.3% in consumer durables and 1.1% in consumer non-durables.

"The March data captures only a part of the shock as uncertainty and weak producer sentiment have yet to fully manifest in production data," Dipti Deshpande, principal economist at Crisil, said. "The deeper impact is expected to show up down the road, particularly in the first quarter of this fiscal."