Latest industrial production numbers offer a mixed picture. The Index of Industrial Production for April–September 2025 grew by just 3% – the slowest half-year in at least five years. Yet momentum improved as the year wore on: quarterly growth picked up to 4.1% in Q2 from 2% in Q1. Manufacturing looked like the bright spot. Output rose 4.8% in September, and 4.9% in July–September – the fastest quarterly pace since late 2023. On a half-year view manufacturing grew 4.1%, up from 3.8% a year earlier. Scratch the surface, though, and the strength is narrow.
The gains are concentrated in a handful of capital-intensive segments – wood, mineral products, basic metals and fabricated metals. More than half of the 23 manufacturing sub-sectors contracted in Q2. Worryingly, labour-intensive industries such as apparel, leather, rubber and plastics all shrank in the September quarter. If this pattern persists, job creation will suffer even as headline output inches up. Mining is the other weak limb. Output contracted in September, in Q2 and across the half-year.
A heavy monsoon explains part of the slump, but the performance is still unusually poor. Reviving the sector should be a priority – for energy security and for strategic minerals. That means quicker, clearer approvals; better evacuation infrastructure; and predictable rules that bring in private capital without compromising environmental safeguards. Consumption is signalling strain, too. Consumer non-durables have contracted for six straight quarters. Base effects play a role, but slack demand is the larger story – spanning essentials as well as discretionary items.
The remedy is not accounting finesse but higher household incomes and more jobs. Policy should now focus on breadth over bragging rights: sustain public investment while crowding in private spending; speed GST refunds and working-capital flows to smaller firms; reduce logistics and compliance costs for labour-intensive exporters; and provide time-bound, rules-based support where frictions are highest. Only a broad-based, job-rich upswing will turn today’s tentative upturn into durable growth.
