India’s Industrial Output Growth Slows to 3.2% in December 2024

India’s industrial output growth slowed to 3.2% in December 2024, a drop from 5% in November, according to the Index of Industrial Production (IIP). The decline was largely driven by weaker manufacturing sector performance, while electricity generation saw a strong increase. This slowdown raises concerns about the overall economic momentum as the country heads into 2025.

What Led to the Slowdown in Industrial Growth?

The industrial growth slowdown in December was influenced by multiple sectoral performances. The manufacturing sector, which has a major share in IIP, grew only 3% in December, compared to 4.6% in the same month in 2023 . Mining sector output also slowed down, growing by 2.6%, much lower than the 5.2% growth seen last year. However, electricity generation surged by 6.2%, significantly higher than the 1.2% growth recorded in December 2023 .

Which Sectors Were Affected the Most?

The slowdown was uneven across different sectors:

Capital Goods: Investment in capital goods remained strong, registering 10.3% growth, up from 3.7% last year .

Consumer Durables: Demand for consumer durable goods rose by 8.3%, compared to 5.2% in December 2023 .

Consumer Non-Durables: This sector witnessed a sharp contraction of 7.6%, reversing from a 3% growth last year .

What Does This Mean for India’s Economy in 2025?

The industrial slowdown comes at a time when India’s overall economic growth for FY 2024-25 is projected at 6.4%, the slowest in four years . Economists attribute the December slowdown to base effects and weak corporate investments. However, government infrastructure spending and rising consumer demand could help stabilize industrial production in the coming months.

As India enters 2025, policymakers will need to focus on reviving manufacturing growth and boosting investment to ensure industrial production stays on track. With global economic conditions also playing a role, India’s industrial output remains a key indicator to watch.

Summary of the news

Key Points for Exam Preparation	Details
Why in News?	India’s industrial output growth slowed to 3.2% in December 2024, down from 5% in November, due to weaker manufacturing sector performance. Electricity grew by 6.2%, while mining slowed to 2.6%. Consumer non-durables contracted by 7.6%, whereas capital goods (10.3%) and consumer durables (8.3%) showed growth.
Industrial Production (IIP) Growth (Dec 2024)	3.2% (compared to 5% in November 2024)
Manufacturing Sector Growth	3% (vs. 4.6% in Dec 2023)
Electricity Sector Growth	6.2% (vs. 1.2% in Dec 2023)
Mining Sector Growth	2.6% (vs. 5.2% in Dec 2023)
Capital Goods Growth	10.3% (vs. 3.7% in Dec 2023)
Consumer Durables Growth	8.3% (vs. 5.2% in Dec 2023)
Consumer Non-Durables Growth	-7.6% (vs. 3% in Dec 2023)
Cumulative IIP Growth (Apr-Dec 2024)	4% (vs. 6.3% in Apr-Dec 2023)
India’s Projected GDP Growth for FY 2024-25	6.4% (slowest in four years)
Factors for Slowdown	Base effects, weak corporate investment, manufacturing slowdown
Possible Recovery Factors	Government infrastructure spending, rising consumption demand