Industrial growth likely to slow down to 6.2 pc for FY25

New Delhi: India’s industrial sector is expected to grow at a slower pace of 6.2 per cent in FY25 compared to 9.5 per cent in FY24, as per advance estimates, primarily due to the base effect and a subdued manufacturing performance in the first half, according to Bank of Baroda report.

However, signs of recovery are emerging for the second half, supported by improved GST collections, steady Purchasing Managers’ Indices (PMIs), and increased capital expenditure.
The upcoming Union Budget is anticipated to introduce measures aimed at boosting manufacturing growth and accelerating the investment cycle, signalling optimism for the sector’s revival.
India’s industrial production surged to a six-month high in November 2024, registering a robust 5.2 per cent growth
compared to 3.7 per cent in October, according to the Index of Industrial Production (IIP) data.

This improvement was driven by broad-based expansion across the manufacturing, mining, and electricity sectors, signaling a positive outlook for the industrial sector in the coming months.

The manufacturing sector led the charge with an impressive 5.8 per cent growth, the highest in eight months, as 15 out of 23 sub-sectors, including furniture, electronics, and machinery equipment, recorded significant year-on-year improvements.

Mining output grew by 1.9 per cent (up from 0.9 per cent in October), and electricity output expanded by 4.4 per cent (up from 2 per cent), reflecting a solid recovery across the board.
Notably, infrastructure and capital goods output recorded remarkable growth at 10 per cent and 9 per cent, respectively, in November.

Consumer durable goods output also soared to a 13-month high of 13.1 per cent, largely due to a festive season boost. However, growth in FMCG goods slowed to 0.6 per cent, indicating some demand challenges in this segment.

While November’s data reflects strong momentum, growth for the fiscal year to date (FYTD) has moderated. IIP growth slowed to 4.1 per cent compared to 6.5 per cent in the same period last year, with manufacturing, mining, and electricity sectors all registering lower growth rates.

Looking ahead, attention will shift to the upcoming Union Budget and RBI policy announcements, both expected to be growth-focused.