Industrial Production Grows 1% In December 2020 After Contraction In November

Industrial Production Index: India's industrial output rose at a stronger-than-expected pace in December as economists expected the IIP to grow at 0.1%.

Representative Image | Getty

India's Industrial Production Index (IIP) for the month of December turned positive again as it showed an increase of 1%, mainly due to basic metals, pharmaceutical, and petrochemical products, and a positive overall manufacturing sector growth.

India's industrial output rose at a stronger-than-expected pace in December as economists expected the IIP to grow at 0.1%.

READ: India's CPI Inflation Falls To 16-Month Low At 4.06% In January

"The Industrial production data at 1% is indicative of the manufacturing activity picking up post lockdown. It will reflect on the GDP data, which will be released later this month," Nish Bhatt, Founder & CEO, Millwood Kane International - an investment consulting firm.

The IIP had contracted 1.9% in November. It was extended in October and September after six straight months of contraction due to COVID-19.

Dr Joseph Thomas, Head of Research - Emkay Wealth Management, said: "The IIP gives some broad indications of a rebound in economic activity with the reading for Dec 20 at 1 % as against - 2.10 % for Nov 20. What is significant is the pickup in both consumer durables and non-durables as also infra goods. While the general direction is of improvement in the reading, it may be too early to make any inference based on IIP numbers of a month or two."

"For the month of December 2020, the Quick Estimates of IIP with base 2011-12 stands at 135.9. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of December 2020 stand at 115.1, 137.5 and 158.0 respectively," said the National Statistical Office (NSO) said in a statement.