Industrial Growth Slows To 2.9% In February Amid Weakness In Manufacturing, Mining

The mining sector registered a modest 1.6 per cent increase in output, a sharp deceleration from the 4.4 per cent expansion recorded in January, indicating subdued activity in extractive industries

Manufacturing, which carries the largest weight in the Index of Industrial Production (IIP), also saw growth moderate to 2.9 per cent in February

Source : PTI

India's industrial output growth moderated to 2.9 per cent in February 2025, dragged down by weaker performance across all three core sectors—manufacturing, mining, and electricity, according to data released by the National Statistics Office (NSO) on Friday. The slowdown follows an eight-month high in January, which had been driven by robust performance in the manufacturing sector.

Sector-wise, manufacturing—the largest component of the Index of Industrial Production (IIP)—grew by 2.9 per cent in February, significantly lower than the 4.9 per cent recorded in the same month last year. Mining activity saw a sharper deceleration, rising by just 1.6 per cent compared to 8.1 per cent in February 2024. Electricity generation expanded by 3.6 per cent, also down from 7.6 per cent a year ago.

Notable Slowdown From January 2025

The latest figures mark a notable slowdown from January 2025, when industrial growth had touched an eight-month high. The government revised January’s IIP growth upward to 5.2 per cent, from the provisional estimate of 5 per cent released in March. February’s reading, however, is the weakest since August 2024, when output had remained flat

Industruial Production

On a cumulative basis, industrial production grew by 4.1 per cent in the April–February period of FY25, compared to a higher 6 per cent growth during the same period a year earlier. Mining and electricity sectors also saw reduced momentum in January, growing by 4.4 per cent and 2.4 per cent respectively, further weighing on the broader industrial performance.

Meanwhile, overall factory output had risen by 5.6 per cent in February 2024, underscoring the year-on-year decline in industrial momentum.

"As expected, the leap year base pulled down the YoY growth of the IIP to 2.9 percent in February 2025 from 5.2 percent in January 2025, largely in line with ICRA’s forecast for the month (+3 percent). The deceleration was broad-based, with all the use-based categories, as well as two of the three sectors barring electricity, witnessing a slower growth in February 2025 vis-à-vis the previous month," said Aditi Nayar, chief economist, Icra, as per a Moneycontrol report.