India's Industrial Output Rises 5% in January, Highest in Eight Months

India's industrial output, based on the Index of Industrial Production, increased by 5 percent in January against 3.5 percent in December 2024, due to strong growth in the manufacturing sector, according to Ministry of Statistics and Programme Implementation (MoSPI) data released on Wednesday.

India's industrial output witnessed a record eight months high growth in January. As per the data, manufacturing sector output increased by 5.5 percent in January against 3.6 percent in the same month a year ago. Mining production witnessed a decline in its growth in January. The sector witnessed a 4.4 percent growth in January 2025, against 6.4 percent in the same month last year.

IIP data

Top three contributors to positive growth in January

The manufacturing of basic metals, coke and refined petroleum products, and electrical equipment significantly contributed to the positive growth of India's industrial output.

"Within the manufacturing sector, 19 out of 23 industry groups at the NIC 2 level have recorded a positive growth in January 2025 over January 2024. The top three positive contributors for January 2025 are - Manufacture of basic metals (6.3%), Manufacture of coke and refined petroleum products (8.5%) and Manufacture of electrical equipment (21.7%)," said MOSPI in its press release.

The quick estimates of IIP stood at 161.3 in January 2025 against 153.6 in January 2024. Industrial production quick estimates IIP stood at the highest mark of 201.9 for the electricity sector.

Retail inflation eases to 7-month-low

Apart from strong industrial output, MOSPI data revealed that the Consumer Price Index (CPI), key metric to measure India's retail inflation, eased to a five-month low of 3.61 per cent in February 2025. The retail inflation eased in the backdrop of cooling inflation in vegetable items and protein rich items.

As per the MOSPI data, "there is decline of 65 basis points in headline inflation of February, 2025 in comparison to January, 2025." Food inflation, based on All India Consumer Food Price Index (CFPI) stood at 3.75% in January.

Sharp decline in food inflation in rural areas

The rural areas of India witnessed a sharp decline in food inflation in February, 2025. The headline inflation remained at 3.79% (provisional) in February, 2025 while the same was 4.59% in January, 2025. The CFPI based food inflation in rural sector stood at 4.06% in February, 2025 in comparison to 6.31% in January, 2025.

Out of all the items assessed in the inflation data, coconut, gold, silver, and onion witnessed the highest year on year inflation at all India level in February. As per MOSPI data, coconut oil, coconut, gold, silver, and onion witnessed the highest inflation rate of 54.48%, 41.61%, 35.56%, 30.89% and 30.42%, respectively.

The top five items showing highest year-on-year Inflation at All India level in February 2025 are coconut oil (54.48%), coconut (41.61%), gold (35.56%), silver (30.89%), and onion (30.42%)

Apart from food inflation, there was a rise in housing inflation in February 2025. The inflation rate for the month stood at 2.91% against 2.82% recorded in January, 2025. The housing sector inflation is compiled based on the data from the urban sector only. The fuel and light inflation rate stood at is -1.33 % in February. Health inflation witnessed a significant surge in one month as it stood at 4.12% in February 2025 against 3.97% in January 2025.