India’s Industrial Output Rises by 5% in January, Signaling Steady Growth

The manufacturing industry, a key source of jobs for the country's young university and engineering institute graduates, recorded a strong 5.5 per cent expansion in January, up from 3.6 per cent seen during the same period last year.

India's industrial economy showed a robust rebound in January 2025, as the Index of Industrial Production (IIP) grew by 5 per cent, reversing the lower growth rate of 3.2 per cent in December, according to figures published by the Ministry of Statistics on Wednesday.

The manufacturing industry, a key source of jobs for the country's young university and engineering institute graduates, recorded a strong 5.5 per cent expansion in January, up from 3.6 per cent seen during the same period last year.

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On the other hand, mining production rose 4.4 per cent during the month, which was marginally less than the 6 per cent increase in January 2024, while electricity generation grew at a modest 2.4 per cent rate.

In the manufacturing industry, 19 of 23 industry groups showed growth over January 2024. At the forefront of the charge were three major contributors: "Manufacture of basic metals" increased by 6.3 per cent, "Manufacture of coke and refined petroleum products" increased by 8.5 per cent, and "Manufacture of electrical equipment" jumped by 21.7 per cent.

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The "Manufacture of coke and refined petroleum products" segment was also supported strongly by expanded production of liquefied petroleum gas (LPG), diesel, and petrol. Likewise, in the category of "Manufacture of electrical equipment," goods like electric heaters, end-facing connectors for fibres and optical cables, and small transformers significantly contributed to expansion.

A breakdown of use-based classification showed that capital goods manufacturing—accounting for machinery in industries—increased by 7.8 per cent in January. This category is a good barometer of real investment in the economy, leading to creation of jobs and growth of incomes in subsequent months.

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Consumer durables, such as electronic items, refrigerators, and televisions, reported a 7.2 per cent increase in production in November, spurred by growing consumer demand against a backdrop of rising incomes.

The major drivers of IIP expansion during January 2025, according to use-based classification, included primary goods, infrastructure/construction products, and intermediate goods.

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Factory growth had slowed down in December after a high of 5.2 per cent in November, which was the highest in six months.

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