This marks the third straight month of sequential decline in industrial output, last seen during the June–August 2022 period. The slowdown follows an upwardly revised growth of 1.9% in May 2025, according to Devendra Kumar Pant, Chief Economist and Head of Public Finance at India Ratings and Research (Ind-Ra).
The growth rates of the three sectors, mining, manufacturing and electricity for the month of June 2025 were (-)8.7 percent, 3.9 percent and (-)2.6 percent respectively.
The mining sector contracted for the third consecutive month in June, while the electricity sector shrank for the second month in a row, putting pressure on overall industrial growth. However, the manufacturing sector provided some cushion, expanding by 3.9% — a three-month high — and helping to limit the overall decline in the IIP.
“Manufacturing sector output grew 3.9% in June 2025 (a three-month high) and limited the pace of decline in IIP growth. IIP growth has sequentially declined for three consecutive months — this last happened during June–August 2022,” he said.
The silver lining was the sequential improvement in the growth of intermediate goods, infrastructure/construction goods, and consumer durables. In contrast, primary goods and consumer non-durables continued to underperform. Output growth in other use-based segments remained positive in June.
According to India Ratings and Research (Ind-Ra), the benefits of easing inflation and monetary policy — in place since February 2025 — have not yet translated into industrial output. The agency anticipates that these factors, along with a relatively good monsoon, could support a gradual recovery in the coming months.
At the sectoral level, 15 out of 23 industrial sectors posted positive growth in June, up from 12 in May. These growing sectors accounted for 56.43% of the total IIP weight in June, compared to 53.10% in the previous month. Nevertheless, sectors such as beverages, leather products, paper, printing, chemicals, and miscellaneous manufacturing continue to exert downward pressure on overall growth.
Ind-Ra projects a marginal improvement in industrial output, with year-on-year growth expected to reach around 2.0% in July 2025.
