India’s industrial production accelerated to 8% in August, reaching its fastest growth in nearly three years, amid strong manufacturing gains and a notable increase in electricity supply, though mining sector weakness persists.
India’s industrial output accelerated in August, underscoring a firmer run of activity in Asia’s third-largest economy as manufacturing and electricity production offset weakness in mining. Data released by the National Statistics Office showed output rose 8% from a year earlier, the fastest pace in 29 months and the second-strongest reading in more than two years. The previous month’s growth was also revised higher to 7.4% from 6.7%.
Manufacturing remained the main driver, rising 9% in August after a revised 8.2% increase in July. Business Standard said the sector delivered its third straight month of growth above 8%, with gains spread across most industries. Of the 23 manufacturing groups, 18 expanded, led by electrical equipment, other transport equipment and motor vehicles, trailers and semi-trailers. The Index of Industrial Production stood at 123.3 in August, compared with 114.2 a year earlier, according to reports in The Times of India and Financial Express.
Electricity and gas supply output increased 12.3%, its strongest pace since May 2024, helping lift the broader industrial figure. By contrast, mining and quarrying contracted 5.6%, a sharper fall than July’s 0.9% decline, with weaker output in non-metallic and fuel minerals weighing on the sector. Water supply, sewerage and waste management growth slowed to 6.3%.
Among major use-based categories, capital goods output rose 16.9%, while intermediate goods increased 13.7%. Infrastructure and construction goods advanced 6.4%, consumer durables climbed 11.1% and consumer non-durables returned to growth at 2.1% after shrinking in July. The Indian Express reported that Rahul Agrawal, principal economist at ICRA, linked part of the manufacturing strength to a favourable base effect tied to inventory adjustments before last year’s goods and services tax changes. Madan Sabnavis, chief economist at Bank of Baroda, said higher prices and weak purchasing power were still limiting demand, even as broader industrial credit growth supported the recovery. For the April-August period, industrial output rose 6.7%, up from 4.2% a year earlier.
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