India’s Industrial Growth Slows in September, Hits Five-Year Low for First Half of FY 2025-26

India’s industrial output witnessed a modest slowdown in September 2025, with growth dipping to 4%, marking a three-month low. Data from the Ministry of Statistics and Programme Implementation show that the first half of FY 2025-26 recorded the weakest industrial growth in at least five years, signalling broad-based moderation across key sectors.

Weakest First-Half Growth in Five Years

The Index of Industrial Production (IIP) expanded by just 3% in April–September 2025, compared with 4.1% during the same period last year. This marks the slowest growth rate since FY 2020-21. The index had surged by 24% in FY 2021-22 due to the post-pandemic rebound, but subsequent years saw a steady deceleration — 7% in FY 2022-23 and 6.3% in FY 2023-24.

Mining and Primary Goods Drag Output

A contraction in mining and primary goods sectors contributed significantly to the September slowdown. Mining activity fell by 0.45% in September after a 6.6% expansion in August. The primary goods sector also weakened, growing only 1.4% compared with 5.4% in the previous month. These declines highlight supply-side pressures that continue to affect the core industrial segments.

Consumer Non-Durables Face Continued Contraction

The consumer non-durables segment contracted by 2.9% in September, following a sharper 6.4% drop in August. The sector had shown 2.2% growth a year earlier. Economists attribute this to the delayed impact of recent GST rate cuts. According to Madan Sabnavis, Chief Economist at the Bank of Baroda, the benefits of lower GST rates are likely to reflect in sales during October and November, as dealers clear inventories labelled with older prices.

Exam Oriented Facts

• IIP growth in September 2025 stood at 4%, compared with 3.2% in September 2024.
• Industrial output grew only 3% in the first half of FY 2025-26 — the slowest in five years.
• Mining contracted 0.45%, while manufacturing rose 4.8% in September 2025.
• Consumer durables recorded strong growth of 10.2% in September 2025.

Manufacturing and Consumer Durables Offer Some Support

The manufacturing sector provided a partial offset, registering 4.8% growth in September against 3.8% in August. Meanwhile, the consumer durables category surged to 10.2%, reflecting robust demand recovery ahead of the festive season. However, analysts caution that sustained industrial revival will depend on easing supply constraints and the full materialisation of GST benefits in the coming months.