The Index of Industrial Production (IIP) indicated that factory production in India increased by 4% year-over-year in August 2025, as reported by the National Statistical Office. There has been a slight decline in this growth rate from the revised 4.3% in July 2025, primarily due to some slowdown in manufacturing.
Mining: The mining industry paced the growth with a 6% rise in output, a big bounce back from a 7.2% decline in July 2025. This is a dramatic reversal from August 2024, when mining production had fallen by 4.3%.
Manufacturing: Manufacturing sector growth was 3.8%, lower than 6% in July 2025. Key drivers were the production of basic metals (12.2%) and motor vehicles, trailers, and semi-trailers (9.8%). Consumer non-durable goods like food and toiletries, however, declined by 6.3% following a 0.5% improvement in July.
Electricity: The output in the electricity sector grew by 4.1%, from the 3.7% growth in July 2025, signaling a consistent appetite for power.
For April to August in the ongoing financial year, the IIP growth was 2.8%, slower than the 4.3% growth the sector had seen during the same period last year.
Economists are positively optimistic about the performance of the industrial segment in the months to come. The expected Goods and Services Tax (GST) rationalization and tariff adjustments are likely to spur demand, especially during the festive season.
This step was expected to help the production for manufacturing in September-October 2025, after the existing inventories were cleared.
On the whole, although industrial growth eased to 4 percent in August 2025, with better performance in the mining and electricity industries, coupled with hopes for demand generated through policy, it is an indication of a revival in the sector shortly.