New Delhi: India's factory output growth eased to a four-month low of 6.7% in September, weighed down by a high base effect and softening mining output, even as manufacturing and power generation continued to support overall industrial activity.The September print marks the sixth monthly Index of Industrial Production (IIP) reading based on the revised 2022-23 base year series. Industrial output expanded 7.8% in August and 6.1% in September 2025.Despite the monthly slowdown, industrial production growth rose to 7.3% in Q2FY27 from 6.2% in Q1, raising expectations of GDP growth exceeding 7% in the July-September quarter.Live Events"With robust IIP growth in Q2 complimenting the strength visible across high frequency indicators, we anticipate GDP (gross domestic product) growth to exceed 7% in Q2FY27," said Aditi Nayar, chief economist, ICRA.Growth stood at 7.8% in the June quarter.Manufacturing, Power GenerationManufacturing, which accounts for 76.1% of the index, rose 7.6% year-on-year in September, slowing from 8.6% in the previous month.
Growth was supported by motor vehicles, trailers and semi-trailers production (19%), electrical equipment (33.9%), and rubber and plastics products (19.9%). Of the 23 industry groups, 17 registered positive growth during the month.2% year-on-year in September compared with 12.3% in August. Electricity generation grew 12.6% in September, while gas supply contracted 6.7%. Strong electricity demand amid deficient rainfall supported power generation.Electricity generation from non-renewable sources grew at 16.5% in September compared with renewable sources growth at 4.3%.Water supply, sewage and waste management grew 5.8% year-on-year in September, down from 6.3% in August.
Mining and quarrying, meanwhile, contracted 6.2% compared with a decline of 4.6% in the month before."Mining output contracted steeply in September led by the non-metallic minerals segment," said Nayar.Use-Based CategoriesAmong the six use-based categories, only consumer non-durables registered higher year-on-year growth in September compared to August.Consumer non-durables output grew 1.4% in September after contracting 1.1% in August.
In contrast, consumer durables growth slowed to 6% from 10.5%."The coming months are the festival and wedding seasons and should witness buoyancy, which should feed back into higher demand," said Madan Sabnavis, Chief Economist, Bank of Baroda.However, Ind-Ra's Pant said deficient rainfall, high crude prices and calibrated tightening are likely to impact consumer demand in the economy.Although growth in capital goods and intermediate goods moderated in September from the previous month, both categories continued to register double-digit expansion.(You can now subscribe to our Economic Times WhatsApp channel)
