India’s industrial production rose to its highest level in over two years in December, led by strong manufacturing activity. The Index of Industrial Production (IIP) grew by 7.8% year-on-year during the month under review, as compared to the revised estimate of 7.2% in November, according to the data released by the Ministry of Statistics and Programme Implementation on Wednesday.
The surge in output was driven by the manufacturing sector, which grew at 8.1% compared to 8.5% in the previous month. Within the sector, 16 out of 23 sub-sectors recorded positive growth, reflecting a broad-based revival. The highest growth recording industries are computer, electronic and optical products (34.9%), motor vehicles, trailers and semi-trailers (33.5%) and other transport equipment (25.1%).
Mining output rose by 6.8%, marking an 18-month high, compared to 5.8% in November. Electricity generation rebounded to 6.3% growth, after contracting 1.5% in previous months.
IIP Industry Breakup
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Primary goods output rose by 4.4% year-on-year in December versus 2.2% in the preceding month.
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Capital goods grew by 8.1% versus 10.1%.
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Intermediate goods grew 7.5% versus 7.4%.
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Infrastructure and construction goods output grew 12.1% versus 13%.
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Consumer durables rose 12.3% versus 11.2%.
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Consumer non-durables output rose 8.3% versus 8%.
On a fiscal year-to-date basis (April–December), industrial output growth moderated to 3.9%, slightly lower than last year, due to weakness in mining and electricity, while manufacturing improved to 4.8%.
Festive cheer and GST rationalisation measures have resulted in sustained pickup in consumption demand. This has been further corroborated by steady uptick in credit demand, according to Jahnavi Prabhakar, economist at Bank of Baroda. “Manufacturing resilience remains intact despite global uncertainties. Upcoming Union Budget, MPC policy decisions, and recent EU-India FTA announcement are expected to further support industrial growth, even as tariff-related risks persist,” she said.
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