India: Industrial production gains steam in December
Latest reading: Industrial production increased 7.8% on a year-on-year basis in December, following a 6.7% increase in the prior month. December’s reading was the strongest since October 2023.
Relative to the previous month’s figures, readings in December improved for manufacturing (+8.1% on a year-on-year basis vs +8.0% in November), mining (+6.8% vs +5.4% in November) and electricity (+6.3% vs -1.5% in November).
Outlook: Growth of industrial production is set to rise even further above the 10-year FY 2015–2024 trend of 3.5% in the fiscal year ending March 2027.
With a trade deal with the U.S. seemingly in place, the major downside risk to the sector’s outlook has subsided. Tailwinds boosting the sector include divestment away from China by Western multinationals, including U.S. phone manufacturer Apple, as well as subsidies under the government’s flagship Production Linked Incentive (PLI) scheme, which aims to help Indian manufacturers produce advanced industrial goods such as semiconductors and pharmaceuticals, increasing the value added of their output.