Industrial production growth stabilizes in September

Latest reading: Industrial production increased 4.0% on a year-on-year basis in September, unchanged from the previous month's reading. Relative to the prior month's data, the reading for manufacturing improved in September (+4.8% on a year-on-year basis vs +3.9% in August). In contrast, readings softened for mining (-0.4% vs +6.6% in August) and electricity (+3.1% vs +4.1% in August).

Outlook: The September print means industrial production expanded 4.1% over the July–September quarter as a whole, the joint-fastest rise since April–June 2024. This bodes well for GDP growth in the quarter, but our panelists continue to expect the economy to decelerate. Over FY 2025 as a whole (April 2025–March 2026), our panelists expect growth of industrial output to rise from FY 2024’s already robust rate. Divestment from China by Western multinationals—such as U.S. phone manufacturer Apple—will aid capital outlays in India’s industrial sector. A further boost will come from subsidies under the 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. Rising U.S. tariffs pose a downside risk.

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