The year-on-year (YoY) growth in the Index of Industrial Production (IIP) decelerated sharply to a 14-month low of 0.4% in October 2025 from 4.6% in September 2025, trailing expectations (ICRA P: +3.0%). While all the three production-based segments witnessed a deterioration between these months, the surprise largely stemmed from manufacturing (to +1.8% in Oct 2025 from +5.6% in Sep 2025). The electricity and mining segments expectedly posted a contraction in October 2025, impacted by excess unseasonal rains in the month (49% above the long period average). Moreover, the output of consumer durables contracted by 0.5% in October 2025 post the GST rate cut-led surge of 10.0% in September 2025. Overall, the GST rate cut-led upswing in manufacturing output in September 2025 was followed by a respite in October 2025 given the festive holidays. Besides, the adverse impact of the US tariffs and penalties is also likely to have impacted production across some manufacturing sub-segments.

• IIP growth eased to 0.4% in October 2025: The YoY growth in IIP slowed from 4.6% in September 2025, led by a broad-based deceleration across all three sub-sectors.
  
• All the six use-based categories saw deterioration: The YoY performance of all the six use use-based sub-segments moderated in October 2025 vis-à-vis September 2025.
  

Source: NSO; CEIC; ICRA Research