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India’s Industrial Output Slows to 4.9% in March 2024 Amid Declining Mining Sector

India’s Index of Industrial Production (IIP) recorded a growth rate of 4.9% in March 2024, showing a slight slowdown primarily attributed to a faltering mining sector. This decline follows a robust 5.6% growth in February 2024 and contrasts sharply with the 1.9% growth seen in March 2023.

Sectoral Performance Overview

The mining sector experienced a significant deceleration with growth plummeting to 1.2% in March 2024 from 6.8% in the same month a year ago. Meanwhile, the manufacturing sector showed resilience, accelerating to 5.2% growth compared to 1.5% in March 2023. Electricity generation surged by 8.6%, marking a recovery from a 1.6% contraction in March of the previous year.

Key Contributors to Manufacturing Growth

Key drivers within the manufacturing sector included the manufacture of basic metals (7.7% growth), pharmaceuticals (16.7% growth), and other transport equipment (25.4% growth). These segments significantly contributed to the overall industrial output expansion in March 2024.

End Use Classification

Segmenting by the end use of goods, primary goods output rose by 2.5%, capital goods by 6.1%, intermediate goods by 5.1%, and infrastructure and construction goods by 6.9%. However, consumer non-durable goods output saw a decline of 4.9%, contrasting with a 9.5% rise in consumer durables output.

Economic Insights and Outlook

Economists point out that the slowdown in industrial production growth reflects the waning effect of previous favorable conditions, notably the leap-year effect. Despite challenges in the mining sector, the uptick in manufacturing and electricity generation suggests some resilience in India’s industrial landscape, albeit with varying sectoral performances.

India's Industrial Output Slows to 4.9% in March 2024 Amid Declining Mining Sector_4.1

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