Workers assemble mobile phones at a Dixon Technologies factory in Noida, India, on Jan. 28, 2021.
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India’s industrial production grew just 0.4% in October, indicating a sharp slowdown in the economy.
The Index of Industrial Production (IIP) fell short of September’s 4% growth and is even lower than the 3.1% expected by economists in a Reuters poll.
Domestic consumption improved across major consumer categories, after a goods and services tax cut took effect Sept. 22.
The Ministry of Statistics & Programme Implementation said the slow industrial production growth could be due to fewer number of working days because of a number of festivals including Dussehra and Deepawali.
Output in the manufacturing sector rose just 1.8% in October vs 4.8 in September, while mining activity and electricity production deteriorated 1.8% and 6.9% respectively.
The growth rates of the three sectors, Mining, Manufacturing and Electricity for the month of October 2025 are -1.8%, 1.8% and -6.9% respectively.
October has been a key month for the economy, as New Delhi rolled out the GST reductions to spur domestic consumption and soften the blow from the 50% U.S. tariff on Indian goods.
Despite the tariffs, the Indian economy grew faster than expected in the quarter ending in September, at an , up from 7.8% in the previous quarter.
The IIP data tracks short-term changes in output across a basket of industrial products. Eight core industries, including steel, cement, electricity, and fertilizer, account for 40% of the index’s weight.
In September, IIP growth held steady at 4.0% as businesses built inventories ahead of a 5-day festive season in October.