India's industrial output growth hits 2-year high of 6.7% in November on strong manufacturing and mining

India's industrial sector demonstrated significant resilience in November 2025, with production climbing to a two-year high of 6.7% in November, primarily driven by strong performances in the mining and manufacturing sectors, showed data from the National Statistics Office (NSO) on Monday.

The factory output, which is measured in terms of the Index of Industrial Production (IIP), has marked a notable acceleration in 2025, compared to the 5% expansion recorded in November 2024. Though it remains below the previous high of 11.9% seen in November 2023.

The NSO revised the industrial production growth to 0.5% for October 2025 from the provisional estimate of 0.4% released in November.

Manufacturing surge fueled by tax incentives

The NSO data showed that the manufacturing sector's output grew 8% in November 2025, a jump from the 5.5% growth recorded a year ago.

This momentum was driven by the rationalization of goods and services tax (GST) rates on various consumer products, which took effect on 22 September.

This policy shift, aimed at boosting demand and consumption in the country ahead of the festive season, resulted in an accumulation of manufacturing orders as businesses moved to capitalize on the benefits of the GST rate rationalization.

Within the manufacturing sector, 20 out of 23 industry groups have reported positive year-on-year growth in November 2025, with basic metals, fabricated metal products, pharmaceuticals, and motor vehicles leading the charge.

“Driven by 8% growth in the manufacturing sector, IIP recorded a 6.7 % year-on-year growth in November 2025. The growth is led by manufacturing of basic metals and fabricated metal products, pharmaceuticals, and motor vehicles,” read an official statement by the NSO.

Mining and power sector growth

The mining sector also showed recovery, posting a 5.4% growth in production against a growth of 1.9% recorded a year ago.

The report also explained that the growth in the mining sector rebounded due to the conclusion of the monsoon season and strong growth in metallic minerals such as iron ore.

However, the power sector faced challenges, with production contracting by 1.5% in November 2025, compared to 4.4% expansion in the year-ago period.

Diversified growth across industry segments

The infrastructure and construction goods also reported a 12.1% growth in November 2025, up from 8% expansion in the year-ago period.

The capital goods segment grew by 10.4% in November 2025, up from 8.9% in the year-ago period.

Consumer segments also showed a generally positive trend. Consumer durables (or white goods production) surged by 10.3% during the reporting month compared to a 14.1% growth in November 2024.

Whereas, consumer non-durables output grew by 7.3% in November 2025 against a 0.6% growth a year ago.

Additionally, the intermediate goods segment reported 7.3% in the month under review against 4.8% growth a year ago, signalling a steady flow of inputs throughout the industrial pipeline.

Experts weigh in

The rebound of the IIP in November after growing at the slowest pace in 14 months in October has come largely on account of the return to normalcy of manufacturing-led factory activity as consumption picked up post the festive period, according to experts.

The production by the manufacturing sector grew by 8% in November against the growth of 5.5% a year ago and just by 2% in October. Key contributors included the manufacturing of basic metals and fabricated metal products, pharmaceuticals, motor vehicles, transport equipment, wool and tobacco products. Together, these segments provided the biggest boost to overall industrial growth.

Notably, while manufacturing growth quadrupled to 8.0%, the average for October-November months was largely unchanged at 5.0%, in line with the Q2FY26 print. Among the use-based categories, only two of the six segments—consumer non-durables and capital goods output—saw an improvement in their growth rates in the October-November vis-à-vis Q2FY26.

While growth in infra/construction goods slowed between these periods, it remained quite strong, which, along with the healthy growth in capital goods output, suggests that investment activity likely remained robust.

“While the year-on-year growth in the IIP surged to a 25-month high of 6.7% in November from 0.5% in October, this upswing largely reflects the shift in the festive calendar, restocking after the festive season sales, as well as some normalization in activity across the mining and electricity segments following the excess unseasonal rains in the previous month," said Aditi Nayar, chief economist and head of research and Outreach at Icra Ltd.

"Despite the demand boost spurred by GST rationalization, IIP growth averaged at 3.6% during October-November FY26, lower than the 4.3% expansion seen in Q2FY26, led by a weaker performance of the electricity sector,” she added.

She said average growth in consumer non-durables remained dull at 1.3% in October-November 2025, trailing the 4.3% rise in consumer durables

"The impact of the US tariffs and penalties is likely to reflect across some of the manufacturing segments, partly offsetting the positive impact of the GST rate rejig. However, electricity demand expanded in December 2025 after a gap of two months, which should boost power generation in the month, auguring well for the IIP growth in the month. We expect the IIP growth to ease to 3.5-5.0% in December 2025, as the base effect normalizes and the benefit from restocking wanes,” she added.

Dipti Deshpande, principal economist, Crisil Ltd, said the first eight months have seen slower IIP growth at 3.3% compared with 4.2% in the same period in 2024-25 because of sluggish exports. "However, in the road ahead, robust consumption demand on the back of a reduction in interest rates, soft inflation and income-tax relief should support industrial production.”

“Agriculture output estimates and expectations are healthy as well and should lend resilience to overall growth. Robust growth in the services (both domestic and export-driven) offers support, too. However, weak exports could stay a sore spot with the US tariffs expected to bite deeper in the fourth quarter. The ongoing geographical diversification of exports should offer some respite, though,” she added.

Crisil expects India’s GDP to grow 7% in 2025-26, compared with 6.5% in the last fiscal year, and then moderate to 6.7% in the next fiscal year.