India's industrial activity witnessed a significant deceleration in October 2025, with the Index of Industrial Production (IIP) growing by a mere 0.4 percent. This marks a sharp slowdown from the 4 percent growth recorded in the previous month of September, according to the latest data released by the government.
Key Drivers Behind the Slowdown
The government release attributed the reduced industrial growth primarily to fewer working days during the month, owing to a series of major festivals including Dussehra, Diwali, and Chhath. Despite the slowdown, the Quick Estimates of IIP for October 2025 stood at 150.9, showing a marginal increase from 150.3 in October 2024.
The sectoral indices presented a mixed picture. The index for Mining was at 126.2, Manufacturing at 151.1, and Electricity at a higher base of 193.4 for the month.
Sectoral Performance: A Tale of Contrasts
A deeper dive into the sectoral performance reveals stark variations. The Mining sector contracted by 1.8 percent year-on-year. In contrast, the Manufacturing sector, which has the highest weight in the IIP, grew by 1.8 percent.
The most pronounced decline was seen in the Electricity sector, which saw output decrease by 6.9 percent. The government note explained that this drop was influenced by prolonged rainfall and comfortable temperatures across several States and Union Territories, which led to a reduced demand for power.
Manufacturing: Bright Spots Amidst Slowdown
Within the manufacturing sector, growth was not uniform. Positive growth was recorded by only 9 out of the 23 industry groups at the two-digit National Industrial Classification (NIC) level when compared to October 2024.
The key industries that acted as the leading contributors to whatever growth was achieved were:
- Manufacture of basic metals, which grew by 6.6%.
- Manufacture of coke and refined petroleum products, registering a growth of 6.2%.
- Manufacture of motor vehicles, trailers and semi-trailers, which expanded by 5.8%.
The overall data indicates that while the festive season disrupted industrial activity, certain core and consumer-linked manufacturing segments demonstrated resilience. Analysts will be watching the November data closely to see if this slowdown was a temporary blip or the beginning of a broader trend, especially as the base effect and domestic demand conditions evolve.
