India’s Index of Industrial Production (IIP) recorded a growth of 5.0% in January 2025, marking a strong expansion from the 3.2% growth observed in December 2024. The IIP index, which measures the overall industrial output of the country, stood at 161.3 in January 2025, compared to 153.6 in January 2024, highlighting sustained economic recovery.

Sector-Wise Performance

The sector-wise breakdown of IIP growth shows a broad-based expansion across key industries:

• Mining sector recorded a 4.4% growth, indicating stable resource extraction.
• Manufacturing sector expanded by 5.5%, contributing significantly to overall industrial growth.
• Electricity generation increased by 2.4%, supporting industrial and residential energy demand.

Within the manufacturing sector, 19 out of 23 industry groups (as per the National Industrial Classification (NIC) two-digit level) reported positive growth, with key contributions from:

• Manufacture of basic metals (+6.3%)
• Manufacture of coke and refined petroleum products (+8.5%)
• Manufacture of electrical equipment (+21.7%)

The expansion of these industries was fueled by higher production of alloy steel flat products, steel pipes, diesel, petrol, transformers, and electric heaters, reflecting increased domestic and export demand.

Use-Based Classification of IIP

The performance of industrial production across different use categories showed steady growth trends:

• Primary Goods Index: 162.8 (+5.5%)
• Capital Goods Index: 116.8 (+7.8%)
• Intermediate Goods Index: 172.3 (+5.2%)
• Infrastructure/Construction Goods Index: 199.6 (+7.0%)
• Consumer Durables Index: 130.2 (+7.2%)
• Consumer Non-Durables Index: 164.5 (-0.2%)

The sharp rise in capital goods production (+7.8%) indicates strong investment activity, while growth in infrastructure/construction goods (+7.0%) reflects increased infrastructure development projects. Consumer durables growth (+7.2%) suggests a resurgence in demand for long-term consumer goods, including appliances and automobiles.

Outlook for India’s Industrial Growth

The robust growth in industrial production in January 2025 highlights strong economic momentum, backed by:

• Manufacturing resilience, particularly in key industries such as metals, petroleum, and electrical equipment.
• Government policies promoting infrastructure development and Make in India initiatives.
• Revival in domestic and export demand, driving increased industrial output.

With strong manufacturing activity, infrastructure expansion, and capital investment, India's industrial sector remains on a steady growth trajectory. The next IIP report for February 2025 is scheduled for release on April 11, 2025, providing further insights into the country's industrial performance.

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