New Delhi, Oct 28 The healthy growth of India’s Index of Industrial Production (IIP) is linked to GST reforms-led stocking and early festive demand and the robust performance of the manufacturing sector, economists and analysts said on Tuesday.
India’s Index of Industrial Production grew 4 per cent year-on-year in September 2025, fuelled by robust manufacturing and electricity output, the latest data showed.
"The manufacturing sector grew by 4.8 per cent YoY in September 2025, improving from a growth rate of 4 per cent YoY in September 2024. The electricity sector also witnessed a healthy expansion of 3.1 per cent on a year-on-year basis in September 2025 from 0.5 per cent in September 2024," industry chamber PHDCCI President Rajeev Juneja said.
He noted that double-digit growth in the manufacturing of basic metals, electrical equipment, computers, electronic and optical products, motor vehicles, and wood products led to the robust performance of the manufacturing sector.
PHDCCI Secretary General and CEO, Dr Ranjeet Mehta, said that the industrial growth momentum, especially in manufacturing and construction sectors, indicates improving domestic demand and rising capacity utilisation amid continued policy support from the government.
Rating agency ICRA's Chief Economist Aditi Nayar said that the IIP remained steady, supported by stocking ahead of GST rationalisation-fuelled demand and early festive onset.
Use-based categories other than primary goods and electricity saw a pick-up, led by a sharp rise in consumer durables and a marginal 10 bps improvement in infrastructure and construction goods, ratings agency Crisil noted.
For the September quarter, IIP growth was stronger at 4.1 per cent compared with 2 per cent in the June quarter.
Crisil Limited noted that private consumption is expected to underpin growth. "Tax relief in the form of income tax cuts and Goods and Services Tax rationalisation, the Reserve Bank of India’s interest rate cuts, and soft food inflation will give a leg up to private consumption," its Chief Economist Dharmakirti Joshi said.
The ratings agency forecasted India’s gross domestic product growth at 6.5 per cent for the current fiscal, with risks tilted to the downside.
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