IIP data: Manufacturing lifts industrial growth to 4-month high of 3.5%; mining and power lag behind

India’s industrial production picked up pace in July, rising to a four-month high of 3.5%, driven largely by the manufacturing sector, as per official data released on Thursday. The last time the country saw a similar level of growth was in March 2025, when industrial output rose 3.9%.Measured in terms of the Index of Industrial Production (IIP), factory output had expanded by 5% in July last year. The National Statistics Office (NSO), in its revised figures for June, kept the growth rate unchanged at 1.5%, in line with the provisional estimates released last month.The NSO data revealed that manufacturing output grew 5.4% in July 2025, up from 4.7% a year earlier. However, mining production contracted by 7.2%, in contrast to a 3.8% rise in the corresponding period the previous year, while power production saw only a modest increase of 0.6%, down from 7.9% a year ago.During the April-July period of FY26, India’s total industrial production expanded 2.3%, compared with 5.4% during the same period last year.Commenting on the data, Aditi Nayar, chief economist and head of research & outreach at ICRA, said, “Encouragingly, growth in manufacturing output accelerated to a six-month high of 5.4% in July 2025 from 3.7% in June 2025, aided by construction inputs and consumer durables,” PTI reported.The manufacturing had previously peaked in January 2025 at 5.8%. She added that IIP growth rose sharply to a four-month high of 3.5% in July 2025, up from 1.5% in June 2025, driven by broad-based improvements across all sectors. However, the mining and electricity sectors continued to underperform, and despite some easing of heavy rain impacts, overall IIP growth remained weighed down.Nayar said that going forward, the better transmission of monetary easing, along with the recent announcement of upcoming GST rationalisation, could support urban consumption sentiment, although discretionary spending might be postponed until the lower tax rates come into effect.“This postponement of discretionary purchases along with the disruptive monsoon rainfall in some regions over the last few weeks could contain the IIP growth sub-3% in August 2025,” she noted.Within manufacturing, 14 out of 23 industry groups recorded positive year-on-year growth in July 2025. In use-based terms, capital goods segment growth slowed to 5% from 11.7% a year ago, while consumer durables (white goods) growth moderated to 7.7% against 8.2% in July 2024, according to PTI.Consumer non-durables output grew a modest 0.5% in July 2025, compared with a contraction of 4.2% a year ago. Infrastructure and construction posted an 11.9% rise, up from 5.5% in the previous year.The data also showed a contraction in primary goods output by 1.7% in July 2025, down from 5.9% growth a year earlier, while intermediate goods expanded 5.8%, slightly lower than 7% in July 2024.