India's Industrial Growth Slumps To Nine-Month Low In May 2025

New Delhi, Jul 1 (KNN) India's industrial activity growth declined significantly to 1.2 per cent in May 2025, marking the lowest level in nine months as multiple sectors experienced contractions and manufacturing growth decelerated substantially compared to the same period last year.

The Index of Industrial Production (IIP), published by the Ministry of Statistics and Programme Implementation on June 30, revealed that industrial growth had not been this weak since August 2024, when the index recorded a marginal 0.1 per cent increase.

The slowdown was attributed to poor performance across manufacturing, mining, and power sectors, with analysts citing the early onset of monsoon conditions as a contributing factor.

Manufacturing sector growth experienced a sharp decline, falling to 2.6 per cent in May 2025 from 5.1 per cent recorded in May 2024 and 3.1 per cent in April 2025.

This represented nearly a 50 per cent reduction in the sector's growth rate month-over-month and a significant year-over-year decline.

The mining sector registered a contraction of 0.15 per cent in May 2025, a stark reversal from the 6.6 per cent growth observed in May 2024.

This marked the second consecutive month of contraction for the sector, which had also declined by 0.15 per cent in April 2025.

The electricity sector experienced the most severe decline, contracting by 5.8 per cent in May 2025 compared to robust growth of 13.7 per cent in the corresponding period last year and 1.75 per cent growth in April 2025.

This dramatic shift highlighted the sector's vulnerability to seasonal and operational challenges.

Primary goods continued their downward trajectory, contracting by 1.9 per cent in May 2025, marking the second consecutive month of decline following a 0.2 per cent contraction in April.

The sector had achieved 7.3 per cent growth in May 2024, underscoring the severity of the current downturn.

Consumer goods sectors presented a mixed picture, with consumer durables contracting by 0.7 per cent in May 2025 against a high base of 12.6 per cent growth in May 2024.

Consumer non-durables performed worse, declining by 2.4 per cent and extending a negative trend that has persisted for four consecutive months, despite the relatively modest 2.8 per cent growth base from May 2024.

Rajani Sinha, Chief Economist, CareEdge Ratings, characterised the results as expected, noting that the slowdown in manufacturing growth combined with contractions in both mining and electricity sectors contributed to the overall decline in IIP growth.

The data underscores broader challenges facing India's industrial sector amid seasonal disruptions and economic headwinds.

(KNN Bureau)