Industrial output growth speeds up in March

Latest reading: Industrial output expanded 3.0% year on year in March, undershooting market expectations but up from February’s 2.7% rise. The acceleration largely reflected faster growth in manufacturing and electricity production. The March data means India’s industrial production rose 4.0% over FY 2024 (April 2024–March 2025) as a whole, down from 5.9% growth in FY 2023 and marking the weakest result in four years. That said, the sector’s growth remained above trend, exceeding the 10-year pre-pandemic average of around 3%.

Outlook: Our panelists see industrial production growing 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 support capital outlays in India’s industrial sector. Additional support will come from subsidies under the flagship ‘Production Linked Incentive’ (PLI) scheme, which aims to help manufacturers produce advanced industrial goods such as semiconductors and pharmaceuticals, increasing the value added of their output.

Panelist insight: Analysts at EIU said: “The industrial sector is set to expand robustly, with an average share of 30.6% of GDP in 2025/26-2029/30, driven by an improving business environment and India’s strong economic growth outlook, which will continue to attract investment.”

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