Industrial Output Slips To 14-Month Low, India’s Production & Demand Indicators Signal Early Signs of Economic Cooling

New Delhi: India’s industrial production slowed significantly in October, falling to 0.4 percent, the weakest growth in 14 months, according to government data. This is a major drop from 4.6 percent in September, reflecting reduced activity across key sectors at the start of the third quarter.

The decline mirrors the poor performance of core industries, whose growth also hit a 14-month low of 0 percent, largely due to weaker contributions from energy-linked sectors.

Core Sectors Show Broad Weakness

The eight core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — make up 40 percent of the Index of Industrial Production (IIP).

In October, the sharpest fall came from coal, which saw an 8.5 percent contraction, reversing strong gains recorded in August. The drop in coal output also impacted power supply, as electricity generation fell 7.6 percent, adding to the overall slowdown.

These declines highlight a deeper issue: sectors linked to energy supply and heavy industry are facing significant pressure, which is dragging overall industrial performance down.

Demand Indicators Also Cooling

The industrial slowdown comes at a time when other economic indicators are weakening as well. India’s GST collections slipped to a 12-month low of Rs 1.7 lakh crore in November, with growth falling to just 0.7 percent, the slowest since the pandemic. Domestic revenue also fell.

Although the IMF notes that India’s economy remains strong despite high US tariffs, economists warn the coming months may see further softness as manufacturing activity and domestic demand begin to ease.