Good News for Industry: IIP Rises to 3.5% in July, Driven by Manufacturing

India's index for industrial production increased to a four-month high of 3.5% in July, as compared to a 1.5% rise in June, government data revealed.

What Helped This Performance?

This better-than-expected performance was backed by manufacturing which increased to a six-month high of 5.4% as compared to 3.7% in the previous month.

The electricity sector returned back to growth 0.6% from -1.2% in June, while mining industry's performance improved to 7.2% from 8.7% in the previous month while it was still in the contractionary territory.

Additionally, there has been some uptick in the larger industry in contrast with the performance of the eight core industries, which together carry a 40% weight in the Index of Industrial Production (IIP).

Core sector growth had also eased to 2% in July from 2.2% a month ago, with four industries slipping into contraction.

Industries like steel and cement had posted robust gains and steel output had jumped 12.8%, which was its fastest since 21 months, while cement increased 11.7%, a four-month high.

Consumer durables also rose to a high of 7.7% in July and the production of non-durables rose to an 8-month high.

Export-oriented manufacturers face fresh uncertainty as US President Donald Trump’s 50% tariff on Indian goods takes effect from August 27, threatening to weigh on production momentum in the second half of FY26.

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