India Industry


Industrial output drops again in March

Industrial production contracted 0.5% over the same month last year in March according to the Quick Estimate of the Index of Industrial Production (IIP). The reading was up from the 1.8% contraction tallied in February and did not meet market expectations of a 1.5% contraction.

The decline was driven by a contraction in manufacturing output, which fell 1.2% over the same month last year, although it was up from the 3.6% contraction seen in February. Production of capital goods continued to be the main determinant of the contraction (March: -12.5% year-on-year; February: -17.5% yoy). In addition, mining fell 0.4% in March, which contrasted the 2.0% expansion tallied in February. Conversely, production in electricity expanded 5.4% in March, although it was down from the 11.5% increase recorded in the previous month. The downward-sloping trend in industrial production continued in March with annual average growth in industrial output falling into the negative for the first time since November 2009. It fell from February's plus 0.2% to minus 0.1% in March.

FocusEconomics panelists expect industrial production to increase 3.9% in fiscal year 2014/2015, which is down 0.2 percentage points from last month's forecast. For fiscal year 2015/2016, the panel expects industrial output to expand 5.6%.


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India Industry Chart

India Industry March 2014

Note: Year-on-year and annual average variation of industrial production index in %.
Source: Ministry of Statistics and Programme Implementation (MOSPI) and FocusEconomics calculations.

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