India’s Industrial Output Rises Just 0.4% in October, Far Below Expectations

India’s industrial output grew only 0.4% in October, sharply missing the 3.1% estimate from economists in a Reuters poll and marking the weakest reading in 14 months. The latest Index of Industrial Production (IIP) figure is far below September’s 4% growth and reflects a notable slowdown across key sectors.

The Ministry of Statistics and Programme Implementation attributed the weaker reading partly to fewer working days in October due to major festivals including Dussehra and Diwali. Even so, it is the slowest pace of expansion since August 2024.

Manufacturing output rose just 1.8% during the month, compared with 4.8% in September. Mining activity contracted 1.8%, while electricity generation fell 6.9%, suggesting broad-based softness across industrial categories. Officials said domestic consumption improved after GST cuts took effect on September 22, but the benefit was not enough to offset lost production days.

October was a critical month for the economy as New Delhi implemented GST reductions to bolster demand amid the impact of a 50% U.S. tariff on Indian goods. Despite external pressures, GDP grew faster than expected in the July–September quarter, rising above the previous quarter’s 7.8% expansion.

Economists say strong consumer demand will help cushion the drag from weaker exports through December. Crisil’s principal economist Dipti Deshpande said rural income gains, lower inflation, reduced interest rates and tax relief should support spending, though government capital expenditure may slow in the second half of the fiscal year as authorities work to meet deficit targets.

The IIP measures short-term changes in output across industries including steel, cement, fertilizers and electricity, which together make up 40% of the index. September’s 4% gain had reflected inventory stocking ahead of the festive season, but October’s data shows momentum fading.