India’s Industrial Output Grows 2.9% In February; Led By Manufacturing And Capital Goods

India’s industrial output, measured by the Index of Industrial Production (IIP), rose 2.9% in February 2025 compared to the same month last year, according to data released by the Ministry of Statistics on Friday.

The manufacturing sector, a critical engine for job creation and economic growth, also posted a 2.9% year-on-year rise.

The sector’s performance was driven by strong output in 14 out of 23 industry groups.

Key contributors included the manufacture of motor vehicles, trailers, and semi-trailers (up 8.9%), basic metals (up 5.8%), and non-metallic mineral products (up 8.0%).

Within basic metals, significant growth came from items like flat products of alloy steel, steel pipes and tubes, and mild steel bars and rods.

In the auto segment, gains were led by auto components, axles, and commercial vehicles, indicating a revival in the automotive industry.

Mining output increased by 1.6%, while electricity generation rose by 3.6%, further supporting overall industrial growth.

On a use-based classification, capital goods production surged 8.2%, reflecting a healthy rise in factory equipment demand — a signal of ongoing investment activity and future job creation.

Consumer durables, such as TVs, refrigerators, and electronic goods, grew 3.8%, driven by higher consumer demand and rising incomes.

Despite February’s lower growth rate compared to January’s 5%, ICRA chief economist Aditi Nayar attributed the moderation to a base effect.

She added that March saw improvement in several high-frequency indicators like GST e-way bills, vehicle registrations, fuel consumption, and port traffic, though steel consumption dipped due to a high base.

The data suggests a stable industrial recovery, with encouraging signs of investment and consumer demand in key sectors.

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