India’s industrial growth hits 10-month low at 1.5% in June 2025

India’s industrial output growth dropped to a 10-month low of 1.5% in June 2025, with mining and electricity sectors contracting sharply. While manufacturing posted modest gains, overall IIP growth in Q1 FY26 slipped to 2%.

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India’s industrial output growth slowed sharply in June 2025, hitting a 10-month low of 1.5%, primarily due to significant contractions in the mining and electricity sectors. This led to the Index of Industrial Production (IIP) rising by just 2% in the April–June quarter, the slowest pace in 11 quarters. The IIP had grown 1.9% in May and 4.9% in June 2024. 

Among the three major IIP segments, Manufacturing performed better with growth picking up to 3.9% compared with 3.2 percent in the previous month. However, mining output declined by 8.7% and electricity generation by 2.6%, mainly due to excessive rainfall during the April–June period.

Ms Aditi Nayar, chief economist at ICRA, noted, “The deceleration was entirely led by mining, which reported a steeper contraction of 8.7 percent in the month as compared to the 0.1 percent dip seen in May 2025. Excess rains in the second half of June 2025 are likely to have weighed on mining output, while also leading to a contraction in electricity generation, although the extent of the same narrowed compared to the previous month.”

The manufacturing sector, which carries a 77.6% weight in the IIP, saw mixed trends. While sectors like basic metals (9.6%), petroleum products (4.2%), fabricated metal products excluding machinery (15.2%), textiles (1.2%), and apparel (4.2%) supported growth, others like chemicals (-3.9%), beverages (-6.5%), computers and electronics (-1.3%), leather (-3.1%), and rubber and plastics (-0.5%) posted contractions. Fifteen out of 23 manufacturing industry groups reported positive year-on-year growth in June.

In use-based categories, capital goods growth fell to 3.5% in June from 13.3% in May, while infrastructure and construction goods improved to 7.2%. Intermediate goods grew 5.5%, and consumer durables rebounded with 2.9% growth. However, consumer non-durables and primary goods continued to contract, declining 0.4% and 3.0% respectively.