US Industrial Production Growth Slows to 4.8% in January, 3-Month Low

India's Industrial Production Growth Slows to 4.8 Percent in January

Key Highlights

• 4.8 percent: India's industrial production growth moderated to a three-month low in January, down from 7.8 percent in December.
• 7.2 percent and 8 percent: Industrial output growth climbed to a 7.2 percent and 8 percent expansion in November and December, respectively, marking the fastest expansion in nearly a year.

Industrial Production Trends

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India's industrial production growth moderated in January, following a sharp year-end acceleration. The cooling is attributed to a return to normalcy rather than a reversal of trend. The latest reading follows a strong rebound in the final months of 2025. Factory output continued to expand at a healthy pace compared with much of FY25, when industrial activity slowed significantly amid uneven demand conditions and base effects.

Long-term Trajectory

A look at the longer trajectory highlights the volatility industrial activity witnessed over the past year. Growth weakened sharply through early FY26, falling to 2.57 percent in April, 1.87 percent in May, and touching a low of 1.52 percent in June. The recovery began in the second half of the year, with output gradually strengthening from 4.27 percent in July to 4.63 percent in September before dipping briefly to 0.53 percent in October.

Manufacturing Sector Performance

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India's manufacturing activity picked up to a four-month high of 56.9 in February, signalling improving industrial momentum in the coming months. Manufacturing emerged as a key bright spot in the latest GDP numbers, expanding 13.3 percent year-on-year in Q3, accelerating from 13.2 percent growth in the previous quarter.

GDP Projections

The government is estimating growth at 7.6 percent in the fourth quarter of the fiscal, indicating only a slight easing in the Jan-March period compared with 7.8 percent growth projected for Q3. The new GDP numbers are based on 2022-23 base. The IIP is due for revision on May 27.