India: Industrial production rises more than expected in April
Latest reading: Industrial production was up 4.9% on a year-on-year basis in April, following a 3.2% rise in the prior month. The increase was again above market expectations.
Relative to the previous month’s data, the reading for manufacturing improved in April (+6.2% in annual terms vs +3.9% in March), as did that for electricity production (+5.9% yoy vs +0.1% in March. In contrast, the reading for mining worsened (-5.1% yoy vs +0.1% in March).
Outlook: Growth of industrial production is set to rise even further above the 10-year FY 2016–2025 trend of 3.4% in the fiscal year ending March 2027. Tailwinds include divestment away from China by Western multinationals, plus government subsidies to boost the production of advanced industrial goods like semiconductors and pharmaceuticals. Higher input costs for energy due to the Iran war pose a downside risk.