India’s Industrial Output Records 7.8% Growth in December 2025: CareEdge Analysis

India’s Index of Industrial Production (IIP) expanded by 7.8% year-on-year in December 2025, marking its fastest growth in over two years, according to an analysis by CareEdge. The improvement was driven by broad-based gains across manufacturing, mining, and electricity, alongside stronger demand indicators in consumer and capital goods segments.

India’s industrial activity strengthened significantly in December 2025, with the Index of Industrial Production (IIP) rising 7.8% compared to the same month a year earlier. This acceleration reflected improved performance across key sectors, including manufacturing, mining, and electricity generation.

Manufacturing output increased by 8.1% in December, maintaining healthy momentum despite a marginal moderation from the previous month. On an annual basis, 16 out of 23 manufacturing sub-sectors recorded positive growth. Basic metals, which account for the largest share within manufacturing, posted a double-digit expansion of 12.7%, up from 11.3% in November.

However, export-oriented segments continued to face pressure, with output declining in leather and related products, textiles, and wearing apparel.

Mining activity also showed improvement, with growth rising to 6.8% in December from 5.8% in November. Electricity generation rebounded strongly, reversing the contraction seen in the previous month to record growth of 6.3%.

Under the use-based classification, infrastructure and construction goods registered double-digit growth of 12.1%, supported by sustained capital expenditure by both central and state governments. Capital goods output expanded by 8.1%, reflecting continued investment activity.

On the consumption side, consumer durables and non-durables recorded higher output growth of 12.3% and 8.3%, respectively, indicating improving demand conditions.

Looking ahead, CareEdge noted that demand-side indicators have strengthened, aided by GST rationalisation, income tax relief measures, earlier RBI rate cuts, and easing inflationary pressures. The upcoming Union Budget is expected to play a critical role in shaping domestic economic momentum amid ongoing global uncertainties.

The outlook for industrial performance will depend on the direction of capital expenditure policies, their impact on private investment, and evolving global trade conditions, including uncertainty related to US tariff measures.