October 2025 IIP plummets as US exports contract

5 Dec 2025 , 05:12 PM

OCTOBER 2025 IIP AT 0.40%; PRESSURE ACROSS THE BOARD

IIP growth for October 2025 subdued at 0.40%. This is sharply lower than the average IIP growth of 4.0% in the previous three months.  There was no revision to previous IIP data for this month. The  pressure was most visible in the export-oriented sectors like leather, apparel, food products etc. However, the sectors catering to the domestic markets were relatively less impacted by the growth crisis.

In terms of yoy IIP growth, mining contracted deeper by -1.8%, as post-monsoon mining activity got hit by unseasonal rains. After the bounce in the previous month, Manufacturing IIP growth fell sharply from 4.8% to just 1.8%, largely due to pressure from the US export stories. However, Electricity IIP fell sharply from 3.1% to -6.9%, as coal supplies got hit once again and power demand also remained tepid. IIP growth for the 7 months of FY26 tapered lower to 2.7%; sharply lower than the 4.0% recorded in the corresponding first half of FY25.

IIP GROWTH STORY IN LAST 1 YEAR

Despite being positive post August 2024, IIP has become very volatile of late. However, after averaging around 4.0% in the previous 3 months, IIP growth fell to a yearly low of 0.40%.

Month	IIP Growth (%)
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	4.12%
Sep-25	4.02%
Oct-25	0.40%

Data Source: MOSPI

The impact of the export tariffs imposed by the US was very starkly visible in October. It was not just mining and electricity that contracted, but even manufacturing fell sharply due to the export impact in October 2025. It must be said that the cut in GST has had a salutary impact on manufacturing, which also has a weightage of 77.63% in the IIP basket. That is what, probably, kept the IIP growth for October 2025 still in the positive.

OCTOBER 2025 IIP: DISSECTING IIP PRODUCT BASKET

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

Product Basket	Weights	Aug-25	Sep-25	Oct-25	FY-26#
Manufacture of food products	5.3025	-5.2	-1.9	-8.0	-2.0
Manufacture of beverages	1.0354	-0.7	-0.3	-2.9	-3.7
Manufacture of tobacco products	0.7985	23.3	2.2	-4.4	8.0
Manufacture of textiles	3.2913	-1.6	1.2	-2.4	-0.8
Manufacture of wearing apparel	1.3225	-4.7	-2.8	-6.1	0.4
Manufacture of leather products	0.5021	-9.0	2.1	-16.4	-5.0
Manufacture of wood products	0.1930	5.7	11.5	7.5	9.8
Manufacture of paper products	0.8724	-3.1	-3.4	-0.8	-2.9
Printing and recorded media	0.6798	-14.8	-4.0	-5.3	-9.9
Coke and refined petroleum products	11.7749	5.4	0.5	6.2	2.2
Chemicals and chemical products	7.8730	-1.2	-1.3	-2.8	-2.4
Pharmaceuticals, botanical products	4.9810	-9.4	-3.5	-1.8	-1.5
Rubber and plastics products	2.4222	-3.6	-3.6	-4.3	0.1
Other non-metallic mineral products	4.0853	2.8	4.3	3.7	5.0
Manufacture of basic metals	12.8043	12.1	12.3	6.6	9.9
Fabricated metal products	2.6549	8.6	7.4	-6.0	6.2
Computer, electronic and optical products	1.5704	1.4	10.2	9.1	3.7
Manufacture of electrical equipment	2.9983	11.2	28.7	6.0	12.4
Manufacture of machinery and equipment	4.7653	-0.2	1.4	-0.3	4.8
Motor vehicles, trailers and semi-trailers	4.8573	9.6	14.6	5.8	9.1
Manufacture of other transport equipment	1.7763	10.5	1.6	2.7	5.4
Manufacture of furniture	0.1311	-2.8	-4.2	6.7	1.4
Other manufacturing	0.9415	-11.6	-9.0	-22.9	-15.4
MINING	14.3725	6.6	-0.4	-1.8	-1.9
MANUFACTURING	77.6332	3.8	4.8	1.8	3.9
ELECTRICITY	7.9943	4.1	3.1	-6.9	0.0
OVERALL IIP	100.0000	4.1	4.0	0.4	2.7

Data Source: MOSPI (# – Apr-Oct)

Let us first look at the positive drivers of IIP growth in October 2025. The positive thrust came largely from sectors like Computer/Electronics, Wood Products, Furniture, Basic Metals, Coke & Refined Petroleum Products, and electrical equipment. These 6 sectors averaged 7.02% IIP growth in October 2025.

The negative pressure on IIP came from Other Manufacturing, Leather Products, Food Products, Wearing Apparel, and Fabricated Metal Products. These 5 products averaged contraction of -11.88% in October 2025. The IIP hit in the month of October continues to come predominantly from the export-oriented sectors, especially the ones that are most vulnerable to the US tariff impact. From averaging around 4% IIP growth in the previous 3 months, the export pressures have pulled down October IIP sharply to 0.4%. That remains a major growth worry!