IIP Growth Climbs to 25-Month High of 6.7% in November

Context:
India’s Index of Industrial Production (IIP) recorded a sharp acceleration to 6.7% growth in November 2025, marking a 25-month high, driven primarily by a strong rebound in manufacturing, infrastructure, and capital goods. The data, released by the Ministry of Statistics and Programme Implementation (MoSPI), signals short-term industrial momentum amid mixed medium-term demand conditions.

Key Highlights:

Overall Industrial Performance

• IIP growth: 6.7% in November 2025 (highest in 25 months).

• Previous peak: 11.9% in October 2023.

Sector-wise Growth Trends

• Manufacturing: 8% growth, a 25-month high, up sharply from 1.8% in October 2025.

• Infrastructure & Construction goods: 12.1% growth, fastest since October 2023.

• Capital goods: 10.4% growth, an 11-month high, indicating improved investment activity.

• Mining: 5.4% growth, a three-month high, after two months of contraction.

• Electricity: –1.5% contraction, down from 4.4% growth in November 2024.

Consumption-linked Sectors

• Consumer durables: 10.3% growth.

• Consumer non-durables: 7.3% growth, reflecting festive-season recovery.

Relevant Prelims Points:

• Issue: Sharp month-on-month rise in industrial output.

• Causes:

  • Festive calendar shift boosting November production

  • Post-festive restocking by manufacturers

  • Demand support following GST rate rationalisation (September)

• Key Data:

  • Average IIP growth (Oct–Nov): 3.6%

  • Average IIP growth (Jul–Sep): 4.3%

• Impact:

  • Headline growth masks moderate underlying demand recovery

Relevant Mains Points:

• Key Definitions:

  • Index of Industrial Production (IIP): Measures output changes in manufacturing, mining, and electricity sectors.

  • Capital Goods: Machinery and equipment used to produce other goods, indicating investment trends.

• Analytical Assessment:

  • Manufacturing-led growth suggests supply-side responsiveness, not necessarily sustained consumption demand.

  • Weakness in electricity output raises questions about industrial energy demand consistency.

• Macroeconomic Linkages:

  • Capital goods growth supports future productive capacity.

  • Infrastructure expansion aligns with public capital expenditure push.

• Way Forward:

  • Strengthen income and employment growth to sustain consumption

  • Maintain public capex momentum to crowd in private investment

  • Address sectoral imbalances, especially in energy and utilities

UPSC Relevance (GS-wise):

• GS 3: Indian Economy, Industrial Growth, Infrastructure

• Prelims: IIP, manufacturing output, capital goods, GST rate rationalisation