India's factory output grows 7.3% in June, fastest pace in nearly two years

New Delhi: India's industrial output grew at its fastest pace in nearly two years in June, driven by a sharp pick-up in manufacturing and electricity generation, signalling resilient domestic growth despite continued global uncertainty.

Industrial production grew 7.3% year-on-year last month, up from 5.0% in May, official data released on Tuesday showed.

The reading was well above economists' expectations of around 5.7% growth, according to a Reuters poll.

"It is comforting to note that India's industrial sector has accelerated the growth momentum even amid global uncertainties and elevated energy prices," said Rajani Sinha, chief economist at CareEdge Rating.

Sakshi Gupta, principal economist at HDFC Bank, said the strong IIP reading, along with other high-frequency indicators, suggests gross domestic product (GDP) growth in the June quarter could come in at 6.8-7%.

IDFC First Bank expects growth of around 7% in the first quarter.

"The underlying month-on-month momentum is strong," Gaura Sen Gupta, chief economist at IDFC First Bank, said, adding that a supportive base effect also helped.

The June release marked the third monthly Index of Industrial Production (IIP) based on the revised 2022-23 base year series. Industrial output had grown 2.2% in June 2025.

Electricity and gas supply expanded 10.6% year-on-year in June compared with 10.3% in May, while manufacturing output rose to 7.8% from 5.2%.

Manufacturing was supported by growth in electrical equipment (34%), motor vehicles, trailers and semi-trailers (17.5%), and food products (10.8%). Of the 23 industry groups, 19 registered positive growth during the month.

Mining and quarrying returned to growth in June, expanding 1% after contracting 1.4% in May, while water supply, sewage and waste management grew 6.1%, up from 5.5%.

Among the use-based categories, capital goods, primary goods and intermediate goods emerged as the largest contributors.