New Delhi, April 28 India’s domestic policy is likely to support growth as the income tax cuts come in force this fiscal and the Reserve Bank of India (RBI) continues with rate cuts, industry experts said on Monday, as pick-up was seen in the Index of Industrial Production (IIP) to 3 per cent in March from 2.9 per cent the previous month.
The power sector output grew by a more robust 6.3 per cent growth during the month while the mining sector proved to be a laggard with a mere 0.4 per cent growth in March, according to data released by the Ministry of Statistics.
“Another year of normal monsoon, and lower crude prices will also cushion the impact of external headwinds,” said Dharmakirti Joshi, Chief Economist, Crisil Limited.
Infrastructure and construction goods led the recovery (8.8 per cent IIP growth in March compared to 6.8 per cent previous month), indicating government capex catching up towards the end of fiscal 2025.
Durables also recovered (6.6 per cent compared to 3.7 per cent), underscoring improving consumer purchasing power with food inflation easing.
Export-oriented sectors such as textiles, machinery and petroleum products saw growth improve, which could be due to frontloading of shipments ahead of reciprocal tariffs kicking in.
The new-age exports segments — computers and electronic products — saw growth surge (21.5 per cent vs 11.2 per cent), again likely due to frontloading, said Joshi.
Mahendra Patil, Founder and Managing Partner, MP Financial Advisory Services, said the FY25 IIP growth of 4 per cent reflects a stable industrial performance amid broader economic normalisation.
“While industrial growth has moderated, the broader economy remains robust, albeit slightly softer than the previous year. Stable core sectors, resilient tax revenues, and benign inflation provide a supportive backdrop for sustained growth into FY2026. With inflation under control, the RBI has further headroom to maintain an accommodative stance, provided external volatilities do not escalate significantly,” he noted.
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