India’s industrial output slows to 6.7% in July from 7.3% in June

India's industrial output expanded by 6.7% in July, following a decline in the mining sector, according to official figures. This marks the fourth monthly Index of Industrial Production (IIP) under the new series. Compared to the previous year, industrial output grew by 6.3% from April to July, while year-on-year growth increased to 4%.

The July 2025 IIP growth rate was 5.4%. Economists anticipate that growth will surpass expectations in the upcoming quarter. Despite challenges arising from the West Asia crisis, high-frequency indicators indicate that growth, which exceeded forecasts in the first quarter of the current fiscal year, may outperform expectations in the second quarter, stated D K Joshi, chief economist at Crisil.

Mining and quarrying experienced a contraction of 0.9% in July, compared to 10.7% growth a year ago. However, manufacturing output increased by 7.3% year-on-year in July, up from a revised 9.5% growth in June. In the manufacturing sector, 19 out of 23 industry groups recorded a positive year-on-year growth in July 2026. Electricity generation rose by 8.7% year-on-year in July, compared to a revised increase of 11.3% in the previous month.

Based on use-based classification, primary goods grew by 4.1%, intermediate items by 10.0%, and construction and infrastructure goods by 6.9%.

Consumer durables were a significant contributor to IIP growth, surging to an eight-month high of 10.5% in July, up from 10.3% in June. Auto sales data suggested robust demand across both urban and rural markets. Passenger vehicle sales, an indicator of urban demand, grew 34.3% year-on-year compared to 24.1% in June. Tractor sales, a proxy for rural demand, increased by 20.5% compared to 11.9%.

Consumer durables output, including cars and phones, grew by 10.5% year-on-year in July, up from a revised 10.3% increase in the previous month. Capital goods output rose by 16.1% year-on-year in July, compared to a revised 17.9% increase in June.