India’s industrial output growth hits over two-year high of 7.8% in December

• India’s IIP surged 7.8% in December 2025, the fastest growth in over two years, beating forecasts.

• Manufacturing, mining and electricity led the rebound, signalling broad-based demand.

• Manufacturing strength was widespread, with 16 of 23 industries expanding.

• Infrastructure goods and consumer durables posted double-digit growth, reflecting strong capex and consumption.

• April–December industrial output rose 3.9%, confirming steady momentum into 2026.

India’s industrial activity gathered notable pace in December 2025, with factory output expanding at its fastest rate in more than two years, according to official data released on Wednesday. The Index of Industrial Production (IIP) rose 7.8 per cent from a year earlier, surpassing market expectations and building on a revised 7.2 per cent increase recorded in November, underscoring strengthening momentum across key sectors of the economy.

The sharper expansion was underpinned by robust performance in manufacturing, mining and electricity, pointing to sustained demand from infrastructure projects, investment-driven segments and consumer markets. Manufacturing output climbed 8.1 per cent during the month, while mining activity increased 6.8 per cent. Electricity generation also remained firm, registering growth of 6.3 per cent.

The December outcome exceeded the 5.5 per cent growth forecast by economists surveyed by Reuters, suggesting industrial activity closed the calendar year on a stronger footing than anticipated.

Manufacturing drives the upswing

A detailed breakdown of manufacturing data shows widespread gains, with 16 out of 23 industry groups at the two-digit National Industrial Classification (NIC) level reporting positive growth in December. Technology-linked segments led the advance, as output of computer, electronic and optical products jumped 34.9 per cent. The automobile segment also posted strong numbers, with production of motor vehicles, trailers and semi‑trailers rising 33.5 per cent. Other transport equipment recorded a 25.1 per cent expansion.

Heavy industry performance added to the momentum. Basic metals output grew 12.7 per cent, supported by higher production of alloy steel flat products, mild steel slabs, and steel pipes and tubes. Pharmaceutical manufacturing increased 10.2 per cent, aided by stronger output of vaccines, digestive treatments and vitamin-based medicines, the data indicated.

From a use-based perspective, infrastructure and construction goods registered growth of 12.1 per cent in December, reflecting ongoing strength in public and private capital expenditure. Consumer durables also expanded at a double‑digit pace of 12.3 per cent, signalling continued resilience in discretionary spending.

Capital goods output rose 8.1 per cent, while intermediate goods production increased 7.5 per cent, reinforcing signs of improving investment cycles and production pipelines. Primary goods recorded a more moderate rise of 4.4 per cent during the month.

On a cumulative basis, industrial production grew 3.9 per cent during the April–December period of the 2025–26 fiscal year, indicating steady expansion despite periods of volatility earlier in the year. The government’s final revision of November 2025 figures further confirmed that industrial growth gained strength toward the end of the year, setting a firmer base as the economy entered 2026.