Industrial output growth hits a 25-month high in November, driven by a strong rebound in manufacturing and mining sectors, offsetting the contraction in electricity. The National Statistical Office (NSO) data reveals an annual 6.7% increase in the index of industrial production (IIP) for November, up from 0.5% in October and 5% in November of the previous year. This surge in growth is attributed to a 8% increase in the manufacturing sector, a 5.4% rise in mining, and a robust expansion in consumer durables and non-durables sectors, which grew by 10.3% and 7.3% respectively.
The positive demand outlook is attributed to factors such as GST rationalisation, income tax relief, and easing inflation, which have boosted consumption. On the investment front, the capital goods sector, a key gauge of investment activity, rose an annual 10.4%, indicating sustained healthy momentum in infrastructure/construction goods and capital goods output. However, the impact of US tariffs and penalties on some manufacturing segments could partially offset the positive effects of the GST rate rejig.
Despite this, the IIP growth is expected to ease to 3.5-5.0% in December as the base effect normalises and the benefit from restocking wanes. The electricity demand has expanded in December 2025 after a two-month gap, which should boost power generation and augur well for IIP growth in the month.
