Factory Output Growth Marginally Improves to 3% in March 2025

India’s factory output, measured by the Index of Industrial Production (IIP), recorded a marginal rise of 3% in March 2025, slightly improving from February’s six-month low but still remaining below last year’s growth of 5.5%. For the entire financial year 2024–25, industrial production expanded by 4%, slower than the 5.9% growth seen in FY24. The slight improvement in manufacturing and electricity sectors was offset by weak mining performance.

Why in the News?

The National Statistical Office (NSO) released fresh data showing that India’s factory output, as measured by the Index of Industrial Production (IIP), grew 3% in March 2025 — a slight improvement over February but much lower compared to last year. The overall industrial growth for the full financial year 2024–25 slowed to 4%, raising concerns and optimism mixed with future investment and consumption trends.

Factory Output Growth

• Factory output increased to 3% in March 2025 from a six-month low of 2.7% in February, although still significantly lower than 5.5% growth recorded in March 2024.

Full-Year Industrial Growth

• For FY25, overall industrial production growth stood at 4%, declining from 5.9% in FY24, mainly due to weak mining activity and moderate manufacturing gains.

Impact of Early Data Release

• The March IIP data was released earlier (on April 28) due to a change in the NSO’s schedule, reducing the data collection period, which may have led to a slightly lower-than-expected figure. Economists expect revisions later.

Manufacturing Sector

• Manufacturing, accounting for 77.6% of the IIP, grew by 3% in March, slightly up from February’s 2.8%, but again lower than 5.9% a year earlier.

Electricity and Mining

• Electricity production rose by 6.3% (up from 3.6% in February but lower than 8.6% last March).
• Mining output barely grew, rising just 0.4%, down from 1.6% in February.

Infrastructure Industries

• Infrastructure sectors recorded a 17-month high growth of 8.8%, fueled by frontloaded government spending and efforts to meet year-end capex targets.

Capital Goods and Investment

• Output of capital goods slowed to 2.4% growth (from 8.2% in February), signaling weaker momentum in investment-linked sectors.

Consumption Trends

• Consumer Durables output rose sharply to 6.6% in March (from 3.7% in February), helped by seasonal factors like summer demand.
• Consumer Non-Durables remained weak, contracting by (-)4.7% for the second consecutive month, reflecting persistent weakness in FMCG demand.

Future Outlook

• Economists forecast that investment and consumption may revive industrial growth, but tariff risks from the US could hurt exports. Monitoring domestic consumption and global geopolitical risks will be crucial moving forward.

Summary/Static	Details
Why in the news?	Factory Output Growth Marginally Improves to 3% in March 2025
March 2025 IIP Growth	3.0%
February 2025 IIP Growth	2.7%
March 2024 IIP Growth	5.5%
FY25 Full-Year IIP Growth	4.0%
FY24 Full-Year IIP Growth	5.9%
Manufacturing Growth (March 2025)	3.0%
Electricity Growth (March 2025)	6.3%
Mining Growth (March 2025)	0.4%
Infrastructure Industries Growth	8.8%
Capital Goods Growth (March 2025)	2.4%
Consumer Durables Growth (March 2025)	6.6%
Consumer Non-Durables Growth (March 2025)	(-)4.7%