India’s IIP accelerates to 7.8% in Dec’25 as manufacturing and infrastructure output surge
Major sectors which registered the highest growth in output in Dec’25 include motor vehicles, other transport equipment, computer, electronic, pharma, amongst others.
Manufacturing sector registered a growth of 8.1% in Dec’25, with select sectors such as motor vehicles, computers and electronics contributing to higher growth. (Image: Freepik)
India’s IIP growth accelerated to 7.8% in December 2025, marking a significant rise from 7.2% in November 2025 and 3.7% in December 2024. All major sectors registered an improvement during the month. Mining and electricity output expanded by 6.8% (an 18-month high) and 6.3% (a 9-month high), respectively, compared with the previous year. The manufacturing sector grew by 8.1%, with select segments like motor vehicles, computers, and electronics driving higher output. Traditional sectors such as wearing apparel and textiles experienced slower growth during the same period.
Despite persistent external risks, the Indian economy, particularly the manufacturing sector, continues to show resilience and is expected to maintain a steady growth trajectory. This resilience is supported by recent trade agreements and a sustained pickup in consumption demand.
Key Sector Highlights:
– **Mining and Electricity:** Mining output grew by 6.8%, while electricity generation rebounded with 6.3% growth after two months of contraction.
– **Manufacturing:** Output grew by 8.1% year-on-year. Within manufacturing, 16 out of 23 subsectors registered positive growth. Motor vehicles (33.5%), computer and electronics (34.9%), and pharma (10.2%) were the top performers. Conversely, electrical equipment, wearing apparel, and textiles saw contractions.
– **Use-Based Classification:** Primary goods output reached a four-month high of 4.4%. Infrastructure goods advanced with double-digit growth of 12.1%, supported by a recent capex push. Consumer durable goods and intermediate goods also grew, reaching 12.3% and 7.5%, respectively. FMCG goods recorded an 8.3% growth, a 26-month high, after a contraction last year. Capital goods output moderated to 8.1% from 10.5% in December 2024.
On a financial year-to-date basis (April-December 2025), industrial output expanded at a slower pace of 3.9% compared with 4.1% in the same period last year. This slowdown was primarily driven by weakness in mining and electricity output, though manufacturing output improved to 4.8%. Festive cheer and GST rationalization measures have helped sustain consumption demand, which is further supported by steady credit demand.
The recent Free Trade Agreement (FTA) with the EU is expected to provide further momentum to the manufacturing sector and is viewed as credit positive. Looking ahead, the focus will shift to the upcoming budget, the finalization of US-India trade deals, and the MPC policy scheduled in the coming weeks, even as tariff concerns linger.
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