IIP Averages 4% in FY25: Four-Year Low in Industrial Output
Why in the news
Industrial output growth cooled across sectors in FY25 on weak consumption, soft exports and slow private investment.
IIP growth by segment
| Segment | FY24 | FY25 |
|---|---|---|
| Mining | 7.5% | 2.9% |
| Manufacturing | 5.5% | 4.0% |
| Electricity | 7.0% | 5.1% |
| Consumer non-durables | +4.1% | -1.6% |
| Consumer durables | 3.6% | 8% |
Key facts
- March 2025 IIP: 3% versus 2.7% in February; electricity grew 6.3% on summer demand.
- Falling vegetable prices pulled retail inflation down but hurt farm incomes and rural demand; durables growth showed urban recovery.
- Repo rate fell from 6.5% to 6% by April, yet private investment sentiment stayed weak; goods exports were flat.
- MSMEs provide 45.8% of exports and employ over 250 million; their size rose from Rs 4 lakh crore (FY21) to Rs 12 lakh crore (FY25).
Way forward
- Targeted fiscal support for rural demand.
- Better MSME export incentives and ease of doing business.
- Timely trade deals, including a US-India pact that serves about 60 million MSMEs.
- Stronger domestic demand to revive private capex.
Exam angle
- IIP: Index of Industrial Production.
- Weakest segment: consumer non-durables.