India’s industrial activity, measured by the Index of Industrial Production (IIP), slowed to a 14-month low of 0.4% in October 2025.This is a sharp decline from previous trends; the last recorded low was 0% in August 2024.
Sectoral Performance Analysis (October 2025)
| Sector | Performance | Reasoning/Observation |
| Electricity | Contracted (-6.9%) | Sharp decline compared to 2% growth last year. Likely due to heavy rains reducing agricultural/cooling demand. |
| Mining | Contracted (-1.8%) | Has contracted in 6 out of the last 7 months, indicating structural sluggishness. |
| Manufacturing | Growth (+1.8%) | Slowed to a near two-year low. Fewer working days due to festivals (Dussehra/Diwali) impacted output. |
| Consumer Goods | Contracted | Non-durables (-4.4%) and Durables (-0.5%) both shrank, signalling weak demand or high inventory pile-up. |
What is the IIP?
- Definition: The Index of Industrial Production (IIP) is a key economic indicator that measures the short-term changes in the volume of production of a basket of industrial products.
- Significance: It serves as a barometer for the health of the industrial sector and provides insights into growth or contraction over a specific period.
- Nodal Agency: Published monthly by the Central Statistics Office (CSO) (now National Statistical Office – NSO), under the Ministry of Statistics and Programme Implementation (MoSPI).
- Base Year: 2011–12.
Composition: How is IIP Calculated?
The IIP is a weighted average of three broad sectors.
- Manufacturing: 77.63% (Highest Weight; 809 items).
- Mining: 14.37% (29 items).
- Electricity: 7.99% (Lowest Weight; 1 item).
4. The “Core” Component: Eight Core Industries
- Weightage: The Eight Core Industries comprise 40.27% of the total weight of the IIP.
- Significance: These are fundamental industries that have a multiplier effect on the economy.
Decreasing Order of Weightage
- Refinery Products (Highest)
- Electricity
- Steel
- Coal
- Crude Oil
- Natural Gas
- Cement
- Fertilisers (Lowest)
