India’s industrial activity experienced a noticeable slowdown in August 2025, with growth dipping to 4%. This marks a decrease from July’s six-month high of 4.3%. Government data reveals that the primary culprits behind this deceleration were the consumer durables and non-durables sectors, alongside a more subdued performance in manufacturing, capital goods, and infrastructure segments.
Despite the overall cooling, there were bright spots. Mining operations, the crucial primary goods sector, and electricity generation all demonstrated a robust and positive turnaround during the month.
The Ministry of Statistics and Programme Implementation’s latest figures for the Index of Industrial Production (IIP), released on Monday, September 29, 2025, indicate that while August 2025’s growth was slower than July’s, it still significantly outpaced the flat 0% growth recorded in August of the previous year.
Madan Sabnavis, Chief Economist at the Bank of Baroda, advises a cautious interpretation of this data. He notes that these figures do not fully reflect the impact of recent tariff changes, which came into effect on August 27th, nor the benefits of GST adjustments that began in late September. Both factors have reportedly influenced business sentiment.
Specifically, the mining and quarrying sector showcased a remarkable recovery. Achieving a 14-month high of 6% growth in August 2025, it successfully broke a four-month period of decline.
Following closely, the primary goods sector also experienced a strong rebound, reaching a seven-month peak with 5.2% growth. The electricity sector similarly shone, posting a five-month high growth rate of 4.1% in August 2025.
Conversely, the manufacturing sector saw its growth rate cool down to 3.8% in August 2025, a decrease from July’s more robust 6%. However, it’s worth noting that this performance still surpassed the 1.2% growth observed in August of the previous year.
The capital goods sector mirrored this trend, with its growth moderating to 4.4% in August 2025, down from 6.7% in July. Like manufacturing, this figure was still an improvement over the 0% growth registered in August last year.
While the infrastructure and construction goods sector maintained an impressive double-digit growth rate of 10.6%, it too saw a slight deceleration compared to July 2025’s 13.7%.
The consumer-focused sectors faced significant challenges. The consumer durables sector’s growth nearly halved, slowing to 3.5% in August 2025 from 7.3% in July and 5.4% last August. Even more concerning, the consumer non-durables sector experienced a contraction of 6.3%, marking its weakest performance in eight months.