The year-on-year (YoY) growth in economic activity, as measured by the ICRA Business Activity Monitor - an Index of high frequency indicators, eased to a 14-month low of 5.9% in October 2025 from 8.3% in September 2025. Excess rains (149% of LPA), US tariffs and penalties, and an unfavourable base owing to the shift in the festive season weighed on growth, even as the GST rationalisation led to a sizeable expansion in vehicle registrations in the month. The former also impacted the performance of the core output, which was flat in October 2025 compared to year ago levels, after expanding by 3.3% in September 2025. This would likely pull down the IIP growth to ~2.5-3.5% in the month (+4.0% in Sep 2025), even as manufacturing growth may remain relatively healthy.

• Growth in ICRA Business Activity Monitor eased to 14-month low in October 2025: The YoY growth in the index eased to 5.9% in October 2025 (+10.9% in Oct 2024) from 8.3% in September 2025 (+7.7% in Sep 2024), owing to excess unseasonal rainfall (149% of LPA in Oct 2025), the impact of the US tariffs and penalties, and the shift in festive dates* that led to an unfavorable base. As many as 10 of the 16 constituent indicators reported a deterioration between these months, including a sizeable contraction in electricity generation, mining output and non-oil exports, which exerted a large drag on the growth in the index.
• Core output was flat vs. year-ago levels in October 2025: This was the weakest performance in 14 months (vs. +3.3% in Sep 2025). Although half of the eight sectors reported a deterioration in their growth performance