India: Industrial output records lowest growth since August 2024 in April
Latest reading: Industrial output increased 2.7% compared to the same month a year earlier in April, which was a deterioration from March’s 3.9% increase but exceeded market expectations. The outturn marked the worst reading since August 2024. April’s downturn was primarily driven by a slowdown in manufacturing output, with declines noted in pharmaceuticals, chemical products plus coke and refined petroleum production.
Meanwhile, annual average industrial production growth fell to 3.9% in April (March: +4.1%), signaling a worsening trend in the industrial sector.
Outlook: Our Consensus is for industrial output to expand slightly quicker than FY 2024’s robust rate in FY 2025. Divestment from China by Western multinationals—such as U.S. phone manufacturer Apple—will aid capital outlays on India’s industrial sector. A further boost will come from subsidies under the flagship ‘Production Linked Incentive’ (PLI) scheme, which aims to help Indian manufacturers produce advanced industrial goods such as semiconductors and pharmaceuticals, increasing the value added of their output. Rising U.S. tariffs pose a downside risk.