India’s Industrial Output Records Strongest Growth in Over Two Years

India’s industrial activity gained strong momentum towards the end of 2025, with the Index of Industrial Production recording a sharp year-on-year growth of 7.8 percent in December. This marked the fastest pace of expansion in over two years, reflecting improving demand conditions across key sectors of the economy.

The December performance followed an upwardly revised growth of 7.2 percent in November, indicating a sustained acceleration rather than a one-off spike. Government data showed that manufacturing, mining and electricity all contributed meaningfully to the improved industrial output, underlining the broad-based nature of the recovery.

Manufacturing, which accounts for a large share of the IIP basket, expanded by 8.1 percent during the month. The sector benefited from steady demand across infrastructure, capital goods and select consumer segments. Mining output rose by 6.8 percent, supported by higher extraction of key minerals, while electricity generation increased by 6.3 percent, pointing to higher industrial and commercial activity.

Within manufacturing, 16 out of 23 industry groups at the two-digit NIC level recorded positive growth. Segments such as computer, electronic and optical products, motor vehicles and other transport equipment reported particularly strong expansion, highlighting resilient demand for technology-driven and mobility-related products.

Basic metals production rose by 12.7 percent in December, supported by higher output of alloy steel products, slabs and steel pipes. Pharmaceutical manufacturing also posted healthy growth, aided by increased production of vaccines and essential medicines, the data showed.

On a use-based classification, infrastructure and construction goods registered strong growth, reinforcing the ongoing capex-led recovery. Consumer durables also recorded double-digit expansion, suggesting a gradual pickup in discretionary spending.

Capital goods output grew by over 8 percent, while intermediate goods production also strengthened, indicating improved investment activity and healthier production pipelines. Primary goods recorded moderate growth during the month.

On a cumulative basis, industrial production expanded 3.9 percent during April to December of the 2025–26 financial year. The latest data suggests that India’s industrial sector entered the final quarter of the year with renewed momentum, supported by public investment, resilient manufacturing demand and improving capacity utilisation.