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Industrial activity dipped marginally to a three-month low of 4% in September 2025. The data also show that the growth in industrial activity during the first half of the financial year (April-September) was the slowest in at least five years.
Growth in the Index of Industrial Production, released by the Ministry of Statistics and Programme Implementation, stood at 3.2% in September of last year. However, growth had since accelerated to 4.3% by July 2025, following which it slowed again.
The overall index grew 3% in the April-September 2025 period, the first half of the financial year 2025-26. This is the slowest in at least five years, the period for which data are readily available.
The index grew 24% in the first half of 2021-22, owing to the low base of the previous pandemic-affected year 2020-21. In the first half of 2022-23, the index grew 7%, which slowed to 6.3% and 4.1% in the corresponding periods of 2023-24 and 2024-25, respectively.
In September, the slowdown in industrial growth was mainly led by the mining, primary goods, and consumer non-durables sectors. Activity in the mining sector contracted 0.45% in September 2025 from a growth of 6.6% in August 2025 and a growth of 0.2% in September of last year.
The consumer non-durables sector continued to contract for the second consecutive month in September 2025, by 2.9%, compared to a contraction of 6.4% in August 2025, and a growth of 2.2% in September last year.
According to Madan Sabnavis, chief economist at the Bank of Baroda, this could be due to the fact that the Goods and Services Tax (GST) rate cuts were implemented late in the month.
“As the GST cuts have targeted this industry, it can be assumed that the real impact will be seen in October-November as dealers have been facing a challenge of selling products with the older price labels,” Mr. Sabnavis said.
On the other hand, the GST cuts could have been the factor that lifted activity in the consumer durables segment, he said. Growth in the sector surged to 10.2% in September 2025, from 3.5% in August 2025, and 6.3% in September last year.
“This pick up can be attributed to companies scaling up output in preparation for the festival season following the GST reforms,” Mr. Sabnavis said. “The same holds for vehicles.”
The primary goods sector saw growth slowing to 1.4% in September 2025 from 5.4% in the previous month, and 1.8% in September of last year.
Growth in the manufacturing sector accelerated to 4.8% in September 2025 from 3.8% in the previous month, and 4% in September 2024.
Published – October 28, 2025 05:31 pm IST
