India’s industrial output grows 4% in August, mining sector leads the way

India’s industrial production rose by 4% year-on-year in August 2025, driven largely by a rebound in the mining and electricity sectors, according to data released by the National Statistical Office (NSO) on Monday.

The growth in the Index of Industrial Production (IIP) comes amid an upward revision of July’s figure to 4.3%, from an earlier estimate of 3.5%. In comparison, industrial output had remained flat in August 2024.

The mining sector led the recovery with a steady 6% growth in August, bouncing back from a 4.3% contraction in the same month last year. The electricity sector also posted a 4.1% increase, reversing a 3.7% decline a year ago.

The manufacturing sector, which accounts for over three-fourths of the IIP, grew by 3.8%, compared to just 1.2% in August 2024.

Strong performance was seen in key segments such as basic metals (up 12.2%), motor vehicles, trailers, and semi-trailers (up 9.8%).

Despite the overall uptick, analysts flagged signs of slowing momentum.

“Despite a favourable base, IIP growth unexpectedly eased to 4% in August from 4.3% in July,” said Aditi Nayar, Chief Economist at ICRA, as quoted by PTI.

“The slowdown was entirely driven by weaker manufacturing, while mining and electricity saw notable improvement.”

Nayar added that festive season demand, supported by GST rationalisation, could boost manufacturing output in the coming months, particularly once existing inventory is cleared.

For the April–August 2025 period, IIP growth stood at 2.8%, lower than the 4.3% recorded in the same period last year, indicating uneven momentum in the industrial recovery.

Primary goods were the only segment to expand faster, rising 5.2 percent after contracting 0.7 percent in July. Infrastructure and construction goods remained a bright spot, growing 10.6 percent, while capital goods expanded 4.4 percent versus 6.8 percent in the previous month.