A worker assembles mobile phones at the Dixon Technologies factory in Noida, India, on January 28, 2021.
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India’s industrial production rose only 0.4% in October, the lowest level in 14 months, indicating a sharp economic slowdown.
Industrial production (IIP) growth was lower than September’s 4% growth and also below the 3.1% expected by economists polled by Reuters.
Domestic consumption improved across major consumer categories after the goods and services tax cut took effect on September 22.
The Ministry of Statistics and Planning Implementation said the slowdown in industrial production growth could be due to fewer working days due to many festivals such as Dussehra and Deepavali. This was the lowest growth since August 2024.
Manufacturing sector output increased by just 1.8% in October compared to 4.8% in September, while mining activity and electricity production worsened by 1.8% and 6.9%, respectively.
In October 2025, the growth rates of the three sectors – mining, manufacturing and power – are -1.8%, 1.8% and -6.9%, respectively.
October was an important month for the economy. New Delhi rolled out GST cuts to stimulate domestic consumption and cushion the blow from the US’ 50% tariff on Indian goods.
Despite the tariffs, India’s economy grew faster than expected in the quarter to September, up from 7.8% in the previous quarter.
Dipti Deshpande, chief economist at Indian research and credit rating agency Crisil, owned by S&P Global, said “robust consumer demand” would partially offset the fallout from weak export demand in the October-December period, benefiting manufacturing.
Strong rural incomes, low inflation, interest rate cuts and tax cuts “should keep consumption healthy,” he said, but added that the government is “likely to curb capital spending in the second half of the year (October-March) to meet its budget deficit target while tax collections are subdued.”
IIP data tracks short-term changes in output across a basket of industrial products. Eight core industries, including steel, cement, power and fertilizer, account for 40% of the index’s weight.
IIP growth stabilized at 4.0% in September as companies built up inventories ahead of the five-day festival season in October.
