Context:
• India’s Index of Industrial Production (IIP) slipped to 4% growth in September 2025, marking a three-month low, with April–September showing the slowest industrial expansion in five years.
Key Highlights:
- Monthly & Half-Yearly Trends
- IIP growth slowed to 4% in September 2025.
- Industrial activity for April–September FY26 grew only 3%, the weakest in five years.
- Sectoral Performance
- Mining sector contracted by 0.45% in September 2025.
- Consumer non-durables shrank by 2.9%, marking the second consecutive month of contraction.
- Drivers of the Slowdown
- Weakness stemming from mining, primary goods, and consumer non-durables.
- Recent GST rate cuts (late September) may have caused temporary disruptions in non-durables demand/production.
Significance
- IIP growth in September 2024 was 3.2%, indicating a marginally better performance compared to September 2025.
• Output had improved to 4.3% in July 2025, but momentum weakened again in September.
• Comparing past years:
- FY22 (Apr–Sept): 24% growth (low-base effect from COVID year)
- FY23: 7% growth
- FY24: 6.3% growth
- FY25: 4.1% growth
• The 2025 slowdown signals persistent demand-side weakness (especially in consumer non-durables) and supply disturbances in mining and primary goods sectors.
• The temporary effect of GST cuts may have caused inventory adjustments or production delays.
• Overall, the industrial trend suggests softening economic momentum entering the second half of FY26.