India’s Industrial Output Growth Slows to 6.7% in July

India's industrial output, measured by the Index of Industrial Production (IIP), grew 6.7% year-on-year in July. This is down from 8.8% in June, according to provisional data from the Ministry of Statistics and Programme Implementation released on Friday. The growth rate is higher than the 5.4% recorded in July 2025. However, it shows a slowdown in industrial activity compared to the previous month.

Key Details

Manufacturing, which makes up over 76% of the IIP, expanded by 7.3% in July. This is a decrease from 9.5% in June but a recovery from a contraction of 2.4% in July 2025. Key sectors driving this growth included motor vehicles and trailers, which rose by 22.2%. Electrical equipment increased by 28.3%, and general industrial machinery grew by 12.1%. Despite this overall growth, the output of consumer non-durables, such as food items and toiletries, fell by 1% year-on-year in July. This contrasts with a revised increase of 5.6% in June.

The output of India's nine core industries, which account for around 40% of the IIP, moderated to 5.4% in July, down from 6% in June. Growth in the core sector was led by iron ore, cement, and electricity, which saw increases of 29.5%, 13.1%, and 9%, respectively. However, production in natural gas, crude oil, and fertilizers contracted during the month. Rahul Agrawal, principal economist at ICRA Ltd, noted that the IIP growth has remained strong in the first four months of FY27. This is despite expectations of a slowdown due to geopolitical tensions in West Asia.

Background

The July data is part of a new IIP series that uses 2022-23 as the base year. This replaces the previous series from 2011-12. The revised series includes 463 item groups comprising 1,042 products, compared to 407 item groups in the earlier version.

Related coverage: UK Productivity Shows Signs of Sustained Improvement.

Based on reporting by: livemint.com, moneycontrol.com