Industrial output growth slips to 14-month low of 0.4% in October

New Delhi: Growth in industrial output slipped to a 14-month low of 0.4% in October, dragged by contraction in electricity and mining production and a sharp slowdown in manufacturing activities, official data showed on Monday.

Factory output, measured in terms of the Index of Industrial Production (IIP), had posted a growth of 3.7% in October 2024. The September data has been revised upward to 4.6%.

The October 2025 IIP growth figure is the lowest since August 2024, when it had come in at 0%.

Manufacturing output growth slumped to 1.8% in October from 5.6% recorded in the previous month. There was contraction in the other two segments of the IIP. Electricity production in October was 6.9% lower when compared with the same month last year while mining output contracted by 1.8% year-on-year.

“The slow growth in the month could be attributed to less number of working days because of a number of festivals in the month including Dussehra, Dipawali and Chhath,” the Ministry of Statistics & Programme Implementation said in a statement.

Cumulative growth in industrial production in the April-October period of the current financial year stood at 2.7% year-on-year.

All of the six use-based segments witnessed a deterioration in their year-on-year performance in October 2025 relative to September 2025. Consumer durables output contracted by 0.5% following the 10% surge seen in September 2025. Besides, the extent of the contraction in consumer non-durables also widened sharply between these months.

“The GST rate cut led to an upswing in manufacturing output in September 2025 was followed by a respite in October 2025 given the festive holidays. Besides, the adverse impact of the US tariffs and penalties is also likely to have impacted production across some manufacturing sub-segments,” said Aditi Nayar, Chief Economist at ICRA.

“Given the base effects and the shifts in the festive calendar in 2025 vis-à-vis 2024, it would be more prudent to assess the average for October and November, once the data for the latter month becomes available,” she added.

According to Dipti Deshpande, Principal Economist at Crisil, a substantial decline in merchandise exports (by 11.8% on-year), some moderation in government capex (which was frontloaded to the first half of the fiscal) and fewer working days in October were the key reasons for the weak IIP numbers in October.

On industrial production outlook, Deshpande said, “For the entire third quarter, however, we expect sturdy consumption demand to somewhat offset the negative impact of weaker export demand and benefit the manufacturing sector. Robust rural incomes, low inflation, reduced interest rates and the push to consumption from tax relief should keep consumption healthy.”

“The government, though, is likely to moderate its capex in the second half to meet its fiscal deficit target amid subdued tax collections,” she added.