India's industrial output growth moderates to 9-month low; here's what experts have to say

New Delhi [India], June 30 : Industrial production activity in India moderated month-on-month with the Index of Industrial Production (IIP) growing 1.2 per cent in May, against 2.7 per cent recorded in April, according to the Ministry of Statistics and Programme Implementation data.

In May, the growth rates of the three sectors, Mining, Manufacturing and Electricity the were (-) 0.1 per cent, 2.6 per cent, and (-) 5.8 per cent, respectively.

The Quick Estimates of IIP stand at 156.6, up from 154.7 in May 2024. The Indices of Industrial Production for the Mining, Manufacturing, and Electricity sectors for May 2025 stand at 136.3, 154.3, and 216.0, respectively.

As per the revised calendar, the Quick Estimate of Index of Industrial Production (IIP) will now be released on the 28th of every month (or the next working day if the 28th is a holiday).

The index is compiled with data received from source agencies, which in turn receive the data from the producing factories/ establishments.

These Quick Estimates will undergo revision in subsequent releases the revision policy of IIP.

Release of the Index for June 2025 will be on Monday, July 28, 2025.

Following are some of the excerpts of the reactions by experts on May IIP:

Aditi Nayar, Chief Economist, ICRA Ltd:

"The IIP growth expectedly eased to a nine month low of 1.2% in May 2025 from 2.6% in April 2025, while printing lower than ICRA's forecast of ~2.0% for the month.

The early onset of the monsoon doused activity in mining and the demand for electricity, with both these sub-sectors of the IIP reporting a contraction in May 2025, amidst an anemic growth of manufacturing.

Moreover, the underlying trends were uneven, with three of the use-based categories displaying a contraction, amidst a continued high 14.1% expansion in capital goods, boosted by a low base.

Tepid industrial volume growth in the first two months of the quarter doesn't augur well for industrial GVA growth in Q1 FY2026."

Jahnavi Prabhakar, Economist, Bank of Baroda:

"IIP growth was lower at 1.2% in May'25 from 6.3% in May'24. Compared with previous year (May'24), slower growth was noted across the board. Manufacturing output slowed most notably, while mining and electricity output contracted. Within manufacturing, major subsectors registered negative growth in May'25 compared with last year. For use-based industries, primary, infra and consumer goods registered moderation in May'25, while capital goods output registered stronger growth. For the near term, the focus would shift towards the possibility of the upcoming bilateral trade deal with the US which bodes well for the growth picture."

Paras Jasrai, Associate Director, India Ratings and Research:

"The industrial output growth dropped to 1.2% yoy in May 2025, aligning closely with India Ratings and Research's (Ind-Ra's) expectations (1.0% yoy). The factory output growth was more than half of that in the previous month (2.7% yoy). A contraction in electricity and mining sectors to the tune of 5.8% yoy (sharpest since June 2020, due to lower-than-normal temperatures) and 0.1% yoy (for the second straight month) along with a high base effect (May 2024: 6.3% yoy) pulled the factory output growth to a nine-month low in May 2025. However, the manufacturing sector averted an outright contraction in industrial output, although it grew at a tepid 2.6% yoy, the slowest expansion since August 2024."

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