14-Month Low Shock: India's Factory Output Crawls At 0.4 Percent. Here's Why
India’s industrial output slowed sharply in October, rising just 0.4 percent as festive holidays and weaker energy and mining activity dragged growth to a 14-month low.
India’s industrial output lost momentum in October, slipping to a 14-month low growth rate of just 0.4 percent, official data released on Monday showed. The slowdown comes after a period of steady expansion in the previous three months, when the Index of Industrial Production (IIP) had reported growth of 3.5 percent in July and 4 percent in both August and September.
Officials indicated that the weak reading was influenced by fewer operational days due to the cluster of major festivals that fell in October, which included Dussehra, Diwali, and Chhath. The Ministry of Statistics noted that the softer performance “could be attributed to the fewer working days because of a number of festivals in the month, including Dussehra, Dipawali, and Chhath”.
Manufacturing Manages Growth Despite Broader Slowdown
Even as the headline index weakened, the manufacturing sector managed to stay in positive territory with a year-on-year growth of 1.8 percent. Out of the 23 tracked manufacturing categories, nine recorded growth. The biggest gains came from “Manufacture of basic metals”, which posted a 6.6 percent rise, followed by “Manufacture of coke and refined petroleum products” at 6.2 percent and “Manufacture of motor vehicles, trailers and semi-trailers” at 5.8 percent.
Government data showed that within basic metals, products such as “HR coils and sheets of mild steel”, “Flat products of Alloy Steel”, and “MS slabs” played a notable role in driving the category’s expansion.
Energy and Mining Pull Index Down
The broader index was weighed down by sharp contractions in mining and electricity output. These sectors declined by (-) 1.8 percent and (-) 6.9 percent, respectively. The official assessment attributed the fall in power generation to a seasonal shift, stating, “Lower demand in October 2025 and consequent decline in electricity generation were driven by extended rainfall season and comfortable ambient temperature across multiple States and UTs.”
A parallel slowdown was visible in India’s eight core industries, which together represent 40 percent of IIP and also recorded their weakest performance in 14 months. Coal production saw the steepest contraction at 8.5 percent, reversing momentum seen earlier in the fiscal year. Electricity generation also mirrored this trend, declining 7.6 percent.
Investment-Led Sectors Offer Some Optimism
Despite the muted headline number, indicators tied to investment demand showed resilience. Output of capital goods rose 2.4 percent during October compared to the same month last year. This category is often watched closely as a barometer of future industrial activity, given its link to factory expansion and employment generation.
Infrastructure and construction goods recorded an even stronger performance, expanding 7.1 percent. Analysts noted that continued government spending on national highway upgrades, railway modernisation, and port expansion helped cushion the overall decline.
With festival-led disruptions behind and winter consumption cycles ahead, industry watchers will look to upcoming data for signs of whether the October slowdown was temporary or an early indication of deeper weakness in India’s industrial recovery.
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