New Delhi [India], March 8 : India's industrial production, measured by the Index of Industrial Production (IIP), is likely to surge to 3.7 per cent year-on-year in January 2025, up from 3.2 per cent in December 2024, according to a report by Union Bank of India.
The report attributed this improvement to an overall rise in industrial activity. However, the report also highlights that despite this monthly increase, the IIP growth in January is likely to be lower compared to 4.2 per cent recorded in January 2024, indicating a year-on-year decline.
It said "Industrial production growth, as indicated by IIP, likely inch-up to 3.7 pc YoY in Jan'25, from 3.2 pc in previous month and 4.2 pc in Jan'24, due to improvement in overall industrial activities".
The report suggested that high-frequency indicators for January 2025 showed broad-based optimism across various sectors. Although India's merchandise exports contracted by 2.4 per cent on a year-on-year basis in January, merchandise imports grew by 10.3 per cent, signaling robust domestic demand.
Other economic indicators also pointed towards positive momentum in industrial activities. E-way bill generation, which reflects the movement of goods across states, rose significantly by 23.1 per cent in January compared to the same period last year.
Additionally, toll collections showed strong growth in both volume and value terms, indicating increased transportation and economic activity.
India's automobile sector witnessed a recovery in January, reversing the contraction seen in the previous two months. Wholesale automobile sales grew by 2.5 per cent year-on-year, supported by a rebound in the two-wheeler segment. Tractor sales recorded double-digit growth for the second consecutive month, while vehicle registrations also expanded during the month.
Petroleum consumption, another indicator of industrial and economic activity, increased by 3.1 per cent in January compared to the same month last year.
This growth reflects higher demand for fuel, which could be linked to increased transportation, manufacturing, and overall industrial expansion.
Overall, the report suggested that while industrial production in January 2025 is expected to improve compared to the previous month, the growth rate remains lower than the same period last year. The positive performance of key economic indicators, however, hints at strengthening industrial momentum in the coming months.
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