Industrial output growth slowed to 3.2% in December 2024

NEW DELHI: India's industrial production growth slowed to 3.2% year-on-year in December 2024 from a six-month high of 5.2%, primarily due to a slowdown in the manufacturing sector, according to official data released Wednesday.

On average, the Index of Industrial Production (IIP) growth was 3.9% in the third quarter of 2024-25.

Sakshi Gupta, principal economist at HDFC Bank explained that the slowdown in manufacturing output was partly due to the base effect.


"Mild improvement in industrial production growth is expected in January partly on expectation of improving consumption demand with base effect helping the manufacturing segment, and positive effect of pick-up in government's infrastructure expenditure," she added.

Overall, industrial activity growth of 4% in 2024-25 (till December) was lower than 6.3% in the corresponding period last year.

The drop in IIP is consistent with a slowdown in core sector output, which grew by 4% in December from 4.4% in the month before, according to data released last month. The eight sectors that comprise the core sector account for 40.27% weightage in the IIP.

Manufacturing sector growth fell to 3% in December 2024 from 5.5% in November.

Among the 23 manufacturing sectors, 16 saw positive growth in December 2024. Key contributors include manufacture of basic metals (6.7%), manufacture of electrical equipment (40.1%), and manufacture of coke and refined petroleum products (3.9%).

"The industries which showed lower or negative growth tended to be related to exports like leather and pharma," said Madan Sabnavis, chief economist at Bank of Baroda.

Domestic demand conditions got reflected in the vehicle segment which witnessed negative growth, he added.

Electricity sector growth of 6.2% In December was higher than 4.4% in November. Similarly, growth in the mining sector reached 2.6% from 1.9% in the same period.