The Hidden Story Behind India’s 4% Industrial Leap-Are You Missing Out on the Next Big Trend?

India's industrial economy is off to a good start in 2025, with official statistics showing a 4.0% year-on-year increase in industrial output in the April-March period, which indicates resilience in the face of global uncertainties. March itself registered industrial output increasing by 3.0%-a notch short of the Reuters estimate of 3.3%-while manufacturing output kept pace with a 3.0% year-on-year growth.

 

Key Highlights:

 

Yearly Performance: Industrial production (IIP) grew 4.0% in FY25, demonstrating consistent momentum notwithstanding the drag from international trade tensions and a high base effect of the last year.

 

March Manufacturing Pulse: Factory activity increased 3.0% in March due to strong domestic demand, restocking of inventories, and better customer mood. The industry's Purchasing Managers' Index (PMI) was at an eight-month high of 58.1, due to soaring new orders and production, as per HSBC and S&P Global.

 

Sectoral Trends: Despite new export orders weakening as a result of global trade uncertainties, domestic demand stayed robust. Manufacturers boosted input buying and drained inventories at the quickest rate in more than three years, indicating optimism about future demand.

 

Inflation and Costs: Input costs increased, especially for products such as copper and electronics, but output price inflation slowed to its weakest pace in one year, serving to underpin consumer demand.

 

Outlook: Business sentiment is upbeat, with around 30% of companies anticipating increased production in the next year. Global trade uncertainties and tariff threats, however, may be challenging, particularly for export-oriented industries.

 

India's manufacturing growth engine keeps chugging along, with robust fundamentals and policy backing, even as it rides out global turbulence.

 

Sources: Reuters, Economic Times, Business Standard