August 2025 IIP robust at 4.05%; as mining output rebounds

1 Oct 2025 , 02:44 PM

AUGUST 2025 IIP AT 4.05%; MANUFACTURING STRUGGLES

IIP growth for August 2025 stood robust at 4.05%. There was a positive revision of 80 basis points to the July 2025 IIP figure which got upgraded from 3.47% to 4.27%. Compared to the revised IIP growth of July, the August IIP at 4.05% is actually a tad lower, although we have to wait for the revisions. August 2025 IIP growth was supposed to be sharply higher due to a favorable base effect, but the sharp fall in manufacturing output mellowed August IIP.

In terms of yoy IIP growth, mining expanded by +6.0%, as post-monsoon mining activity restarted. Manufacturing IIP growth fell from 6.0% to 3.8% due to the impact of the steep tariffs imposed by the US. Electricity IIP improved from 3.7% to 4.1%, as coal supplies also started to stabilize. Five-month IIP growth overall stood at 2.8%; which is sharply lower than the 4.3% recorded in the corresponding 5 months of last year.

IIP GROWTH STORY IN LAST 1 YEAR

Despite being positive post August 2024, IIP has become very volatile of late.

Month	IIP Growth (%)
Aug-24	0.00%
Sep-24	3.23%
Oct-24	3.73%
Nov-24	4.96%
Dec-24	3.74%
Jan-25	5.21%
Feb-25	2.72%
Mar-25	3.94%
Apr-25	2.57%
May-25	1.87%
Jun-25	1.52%
Jul-25	4.27%
Aug-25	4.05%

Data Source: MOSPI

The favourable base effect of last year should have ideally led to a surge in the IIP growth. However, that was not the case as manufacturing growth was slowed by the tariffs and that led to an overall slowdown in IIP growth due to the high weightage of manufacturing. Mining and electricity showed a positive trend, with mining showing a sharp turnaround.

AUGUST 2025 IIP: DISSECTING IIP PRODUCT BASKET

The table captures comparative IIP growth for last 3 months, with respective components.

Product Basket	Weights	Jun-25	Jul-25	Aug-25
Manufacture of food products	5.3025	0.2	-1.0	-4.8
Manufacture of beverages	1.0354	-7.6	-6.9	-0.5
Manufacture of tobacco products	0.7985	2.3	10.3	23.4
Manufacture of textiles	3.2913	1.5	-1.6	-1.5
Manufacture of wearing apparel	1.3225	4.0	0.9	-5.3
Manufacture of leather products	0.5021	-3.0	-3.3	-9.3
Manufacture of wood products	0.1930	0.6	17.2	5.1
Manufacture of paper products	0.8724	-3.1	-2.8	-3.1
Printing and recorded media	0.6798	-10.1	-10.2	-16.3
Coke and refined petroleum products	11.7749	4.5	0.7	5.4
Chemicals and chemical products	7.8730	-3.9	-0.7	-1.9
Pharmaceuticals, botanical products	4.9810	0.9	3.5	-9.2
Rubber and plastics products	2.4222	0.2	-2.7	-3.7
Other non-metallic mineral products	4.0853	3.0	9.5	2.9
Manufacture of basic metals	12.8043	9.2	14.1	12.2
Fabricated metal products	2.6549	14.9	9.4	8.7
Computer, electronic and optical products	1.5704	-0.3	4.7	1.4
Manufacture of electrical equipment	2.9983	4.6	14.3	11.4
Manufacture of machinery and equipment	4.7653	5.3	6.2	-0.3
Motor vehicles, trailers and semi-trailers	4.8573	4.0	7.6	9.8
Manufacture of other transport equipment	1.7763	0.5	17.7	10.5
Manufacture of furniture	0.1311	10.2	6.6	-3.1
Other manufacturing	0.9415	-17.3	-14.5	-11.5
MINING	14.3725	-8.7	-7.2	6.0
MANUFACTURING	77.6332	3.7	6.0	3.8
ELECTRICITY	7.9943	-1.2	3.7	4.1
OVERALL IIP	100.0000	1.5	4.3	4.0

Data Source: MOSPI

Let us first look at the positive drivers of IIP growth. The positive thrust came largely from sectors like Tobacco Products, Basic Metals, Electrical Equipment, Transport Equipment, motor vehicles, and Fabricated Metal Products. These 6 sectors averaged 12.7% IIP growth in August 2025.

The negative pressure on IIP came from Printing & Recorded Media, Other Manufacturing, leather products, pharmaceutical products, wearing apparel, and food products. These 6 products averaged contraction of -9.4% in August 2025. The IIP hit in the month of August has largely come from the export-oriented sectors, especially the ones that are most vulnerable to the US tariff impact. That remains the real challenge for IIP growth!