India’s industrial production grew 4.9% in April, marking the first reading under a revamped Index of Industrial Production (IIP) that shifts the base year to 2022-23. A double-digit jump in capital goods output and resilient manufacturing activity more than offset a deepening slump in mining.
The data, released by the national statistical office (NSO), compares with a downwardly revised 3.2% growth in March under the old 2011-12 series and a 5.7% expansion recorded a year earlier. The headline general index stood at 118.9 in April, up from 113.1 a year ago.
The latest print was the strongest since December, excluding February’s 5.3% expansion, and largely shrugged off the drag that economists had expected from the conflict in West Asia.
Manufacturing Carries the Index
Manufacturing, which now accounts for 76.1% of the index, grew 6.2% year-on-year (y-o-y) and remained the principal driver of overall industrial growth, the NSO said. Seventeen of the 23 manufacturing groups recorded expansion, led by motor vehicles, trailers and semi-trailers, electrical equipment, and machinery and equipment.
In contrast, mining and quarrying contracted 5.1%, making it the only major sector to shrink. Within the sector, only metallic minerals—including newly tracked rare-earth minerals—registered growth, rising 12.3%. Fuel minerals declined 5.7%, while non-metallic minerals, including minor minerals, fell 14.2%.
Electricity and gas supply increased 4.9%, while the newly introduced water supply, sewerage and waste management category rose 6.6%.
The use-based classification pointed to investment-led growth. Capital goods output surged 16%, the strongest increase among all categories. Intermediate goods rose 7.7%, while infrastructure and construction goods advanced 7.1%. On the consumer side, durables grew 4.3% and non-durables 2.8%. Primary goods output rose a modest 0.8%, indicating softer momentum in everyday demand.
A Broader, Modernised Basket
April’s release marks the debut of a more granular series designed to better reflect the current structure of Indian industry. The revised index expands the basket to 463 item groups from 407 and broadens sectoral coverage by adding gas supply and water, sewerage and waste management to the traditional sectors of mining, manufacturing and electricity.
The basket also reflects structural changes in the economy over the past decade. New additions include CCTV cameras, medical stents, human vaccines, non-woven textiles and spacecraft parts, while products such as kerosene, CFL bulbs and sewing machines have been removed.
A closer look at the energy segment highlighted underlying volatility. The gas-supply sub-category contracted 11.2%, even as electricity generation rose 5.9%. Renewable power generation increased 18%, compared with a 2.8% rise in non-renewable sources. Megha Arora, director at India Ratings & Research, attributed the decline in gas supply to the ongoing crisis in West Asia.
Costs, Not Demand, Seen as the Bigger Risk
Economists cautioned that the strong start to the fiscal year may not be sustained. Industrial output could remain subdued in the coming months amid weaker global demand and supply-chain disruptions, according to Dipti Deshpande, principal economist at CRISIL Rating.
The larger risk, she said, stems from rising costs. The energy shock triggered by the conflict in West Asia has evolved into a broader price shock, increasing the cost of fuel, transportation and other imported inputs.
The data also come as the government seeks to address long-standing gaps in India’s statistical framework. Saurabh Garg, secretary at the ministry of statistics and programme implementation (MoSPI), said a discussion paper on a new Index of Service Production has been released and that the indicator could be published as early as next month.
Price Indices Next in Line
The industrial overhaul is the latest step in a broader revamp of India’s macroeconomic indicators. The government has already shifted the GDP base year to 2022-23 and updated the consumer price index (CPI) base year to 2024.
The next major revision will be on the wholesale side. The department for promotion of industry and internal trade (DPIIT) is set to update the wholesale price index (WPI) base year to 2022-23 and introduce a producer price index (PPI). A media briefing on the changes is scheduled for Tuesday and will be led by principal economic adviser Praveen Mahto.
In a notable sequencing decision, MoSPI said it had already obtained the updated 2022-23 WPI deflators from DPIIT and used them to compile the April IIP. As a result, the April figures will not require revision once the new WPI series is officially released.
Mr Garg indicated, however, that any eventual transition from WPI-based deflators to an output-based PPI would not be immediate. The ministry plans to first assess the stability and reliability of the new index before considering a broader shift.
