Context:
India’s industrial production growth, measured by the Index of Industrial Production (IIP), slowed sharply to 0.4% in October 2025, marking a 14-month low. The slowdown was primarily driven by contraction in the electricity sector and weak consumer demand, particularly in consumer non-durables.
Key Highlights:
Industrial Performance Overview
- IIP growth: 0.4% (October 2025) — lowest since August 2024 (0%)
- Indicates overall industrial slowdown amid demand-side and sectoral stresses
Sector-wise Performance
- Electricity sector: –6.9% contraction
- Reversal from +2% growth in October 2024
- Manufacturing sector: +1.8% growth
- Near two-year low, reflecting weak industrial momentum
- Mining and quarrying: –1.8% contraction
- Continues a multi-month declining trend
- Consumer non-durables: –4.4% decline
- Signals weak consumption demand and inventory correction
- Infrastructure & construction goods: +7.1% growth
- Still positive, but slower than previous quarters
Underlying Concerns
- Falling electricity output suggests lower industrial and commercial activity
- Weak consumer demand points to inflationary pressures and income stress
- Persistent mining contraction highlights structural and regulatory challenges
Relevant Prelims Points:
- Index of Industrial Production (IIP):
- Measures short-term changes in volume of production across industries
- Published monthly by National Statistical Office (NSO)
- Covers Manufacturing, Mining, and Electricity sectors
- Issue & Causes:
- Demand slowdown, especially in consumer non-durables
- Energy sector contraction affecting overall industrial output
- Global uncertainty and domestic inflationary pressures
- Government Initiatives (Contextual):
- PLI Schemes to boost manufacturing
- Infrastructure push through capital expenditure
- Energy sector reforms for efficiency and reliability
- Benefits & Impact:
- IIP helps policymakers track economic momentum
- Guides monetary and fiscal policy decisions
- Challenges:
- Over-reliance on infrastructure-led growth
- Weak consumption recovery
- Sectoral imbalances in industrial growth
Relevant Mains Points:
- Key Facts & Definitions:
- IIP is a leading indicator of economic activity
- Consumer goods split into durables and non-durables
- Electricity output closely linked with industrial capacity utilisation
- Conceptual Linkages:
- Demand-side slowdown vs supply-side reforms
- Role of consumption in sustaining growth
- Structural issues in mining and power sectors
- Keywords:
- Industrial slowdown, consumption demand, capacity utilisation, sectoral divergence
- Way Forward:
- Strengthen domestic consumption through income and employment support
- Ensure stable power supply and energy sector reforms
- Address mining bottlenecks via faster clearances and policy certainty
- Balance infrastructure growth with broad-based manufacturing revival
UPSC Relevance (GS-wise):
- GS 3: Indian Economy, Industrial Growth, Infrastructure, Inclusive Growth