What Factors are Contributing to Steady IIP Growth?
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Synopsis
India's industrial growth is on a steady rise, influenced by GST reforms and early festive demand. This analysis explores how these factors, alongside robust manufacturing performance, drive the country's economy forward. Discover the key trends and insights that shape India's industrial landscape.
Key Takeaways
- India's IIP has shown a growth of 4 percent YoY.
- Manufacturing sector growth stands at 4.8 percent YoY.
- Electricity sector growth improved to 3.1 percent.
- GST reforms significantly impact stocking and demand.
- Private consumption is projected to be a key growth driver.
New Delhi, Oct 28 (NationPress) The steady expansion of India’s Index of Industrial Production (IIP) can be attributed to stocking driven by GST reforms, early festive demand, and the strong performance of the manufacturing sector, according to economists and analysts on Tuesday.
The latest data reveals that India’s IIP grew by 4 percent year-on-year in September 2025, bolstered by impressive manufacturing and electricity output.
The manufacturing sector recorded a growth of 4.8 percent YoY in September 2025, an improvement from 4 percent YoY in September 2024. The electricity sector also saw a commendable growth of 3.1 percent YoY in September 2025, up from 0.5 percent in the previous year, said Rajeev Juneja, President of the industry chamber PHDCCI.
He highlighted that the double-digit growth in the production of basic metals, electrical equipment, computers, electronic and optical products, motor vehicles, and wood products contributed to the manufacturing sector's robust performance.
Dr. Ranjeet Mehta, Secretary General and CEO of PHDCCI, remarked that the momentum in industrial growth, particularly in manufacturing and construction, reflects an increase in domestic demand and improved capacity utilization, supported by ongoing government policies.
Aditi Nayar, Chief Economist at ICRA, stated that the IIP's stability is attributed to stocking in anticipation of GST rationalisation and the early onset of festive demand.
According to Crisil, use-based categories excluding primary goods and electricity experienced an uptick, led by significant growth in consumer durables and a slight improvement in infrastructure and construction goods.
For the September quarter, IIP growth was notably higher at 4.1 percent, compared to 2 percent in the June quarter.
Crisil Limited forecasts that private consumption will drive growth. Dharmakirti Joshi, Chief Economist, noted that tax relief through income tax cuts and GST rationalisation, alongside the Reserve Bank of India’s interest rate cuts and moderate food inflation, will bolster private consumption.
The agency predicted India’s GDP growth at 6.5 percent for the current fiscal year, with potential downside risks.
Point of View
It is evident that the positive growth trajectory of India's Index of Industrial Production reflects not just a recovery but a resilient economy. The combination of policy support, festive demand, and manufacturing strength positions India favorably in the global market.
NationPress
28/10/2025
Frequently Asked Questions
What is the latest growth rate of India's IIP?
India's Index of Industrial Production (IIP) grew by 4 percent year-on-year in September 2025.
How has the manufacturing sector performed recently?
The manufacturing sector experienced a growth of 4.8 percent YoY in September 2025, up from 4 percent in the previous year.
What factors are driving the IIP growth?
The IIP growth is largely influenced by GST reforms, early festive demand, and a strong performance in the manufacturing sector.
What is the forecast for India's GDP growth?
Crisil forecasts India's GDP growth at 6.5 percent for the current fiscal year.
Which sectors are seeing notable growth?
Sectors such as basic metals, electrical equipment, and consumer durables are witnessing significant growth.
