India’s industrial production grew just 0.4% in October, a 14-month low that indicated a sharp slowdown in the economy.
The Index of Industrial Production (IIP) fell short of September’s 4% growth and is even lower than the 3.1% expected by economists in a Reuters poll.
Domestic consumption improved across major consumer categories, after a goods and services tax cut took effect Sept. 22.
The Ministry of Statistics & Programme Implementation said the slow industrial production growth could be due to fewer number of working days because of a number of festivals including Dussehra and Deepawali. It is the lowest increase since August 2024.
Output in the manufacturing sector rose just 1.8% in October vs 4.8% in September, while mining activity and electricity production deteriorated 1.8% and 6.9% respectively.
The growth rates of the three sectors, Mining, Manufacturing and Electricity for the month of October 2025 are -1.8%, 1.8% and -6.9% respectively.
October has been a key month for the economy, as New Delhi rolled out the GST reductions to spur domestic consumption and soften the blow from the 50% U.S. tariff on Indian goods.
Despite the tariffs, the Indian economy grew faster than expected in the quarter ending in September, at an , up from 7.8% in the previous quarter.
Dipti Deshpande, principal economist at S&P Global owned Indian research and credit rating company Crisil, said “sturdy consumption demand” will partially offset the negative impact of weaker export demand between October and December, benefitting the manufacturing sector.
Robust rural incomes, low inflation, reduced interest rates and tax relief “should keep consumption healthy” she said, adding that government is however “likely to moderate its capex in H2 [October-March] to meet fiscal deficit target amid subdued tax collections.”
The IIP data tracks short-term changes in output across a basket of industrial products. Eight core industries, including steel, cement, electricity, and fertilizer, account for 40% of the index’s weight.
In September, IIP growth held steady at 4.0% as businesses built inventories ahead of a 5-day festive season in October.
Source: CNBC