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India: Industrial production picks up steam, expands at multi-year high

December 14, 2015

In October, industrial production expanded a notable 9.8% compared to the same month last year. The reading was above September’s revised 3.8% increase (previously reported: +3.6% year-on-year) and marked the best result since October 2010. In addition, October’s result overshot market analysts’ expectations of a 7.8% expansion.

October’s acceleration was driven by higher growth in the manufacturing and mining sectors. Manufacturing production grew at the fastest pace since June 2011, expanding 10.6% (September: +2.9% yoy). In addition, mining production picked up from 3.0% growth in September to 4.7% in October. However, electricity production moderated, after recording its best result in almost a year in September, decelerating to a 9.0% expansion (September: +11.4% yoy).

On a use-based classification, the improvement was driven by stronger growth in the production of capital, intermediate and consumer goods. However, basic goods lost steam in October.

As a result, the trend improved in October. Annual average growth in industrial production picked up from September’s 3.3% to 4.4% in October.

FocusEconomics panelists expect industrial production to increase 5.2% in fiscal year 2015, which is down 0.3 percentage points from last month’s forecast. For fiscal year 2016, the panel expects industrial output to expand 6.2%.


Author: Angela Bouzanis, Senior Economist

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India Industry October 2015

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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