India: Industrial production accelerates in February
Latest reading: Industrial production was up 5.2% on a year-on-year basis in February, following a 5.1% rise in the prior month.
Relative to the previous month’s data, the reading for manufacturing improved in February (+6.0% in annual terms vs +5.3% in January) as output of chemicals, machinery and motor vehicles strengthened. In contrast, the reading for mining worsened (+3.1% vs +4.3% in January) as output of coal fell, and the reading for electricity production also deteriorated (+2.3% vs +5.1% in January).
Outlook: Growth of industrial production is set to rise even further above the 10-year FY 2015–2024 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.