- India's IIP growth slowed to 4.1% in March, down from 5.2% in February
- Manufacturing output fell to 4.3% growth, down from 5.9% in February
- Power generation growth dropped sharply to 0.8% from 2.3% in February
India's Index of Industrial Production (IIP) growth in March softened to 4.1% in March, dragged down by a slip in manufucatring and electricity output.
This marked a significant decline as compared to the acceleration of 5.2% recorded in February. However, it stayed ahead of the estimate of 2.7%, as projected by the analysts tracked by Bloomberg.
The jitters from the US-Iran war, which disrupted energy supplies, weighed on the manufacturing sector. The output declined to 4.3% from 5.9% in February. Power generation slumped to 0.8% from 2.3%.
However, mining sector saw an uptick as the demand for coal accelerated amid the global headwinds. The cumulative mining output rose to 5.5% in March, as against 3.1% in the preceding month.
Based on use-based classification, the output of primary goods grew by 2.2%, marking an uptick from 1.8% in February. Capital goods output continued to surge, with a 14.6% climb in February. In the preceding month, it had grown by 12.4%.
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The production of intermediate goods declined by 3.3% in March, following a 7.2% growth in February, whereas infrastructure goods saw growth sliding to 6.7% from 11.1%.
The consumption segment was mixed in March, with consumer durables output declining to 5.3% from 7.1%, whereas the consumer non-durables output rose to 1.1% from -0.5%.
The data released by the government corresponds to the month of March, when the war in Middle East choked the supplies of liquified petroleum gas. Various manufacturing units were impacted, whereas the hospitality industry was also impacted due to the unavailability of commercial LPG cylinders.
The HSBC India Manufacturing Purchasing Managers' Index (PMI), released earlier this month, showed India's manufacturing sector grew at its slowest pace in nearly four years in March, weighed down by rising cost pressures, intense competition, heightened uncertainty and the ongoing conflict in West Asia.
The (PMI) declined to 53.9 in March from 56.9 in February, marking its lowest reading since June 2022. A PMI reading above 50 indicates expansion, while a reading below 50 signals contraction.
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