India’s Industrial Output Slows to 0.4% in October Amid Fewer Working Days and Weak Demand

New Delhi — India’s industrial output recorded a modest rise of 0.4 percent in October on a year-on-year basis, marking a significant slowdown compared to the previous month’s revised expansion of 4.6 percent.

The latest official data indicates that disruptions caused by major festivals, a reduction in working days, and softer demand across several categories collectively weighed on overall activity during the month.

The manufacturing sector, which forms the largest component of industrial production, grew 1.8 percent in October. This was markedly lower than September’s revised 5.6 percent rise, reflecting broader cooling in factory activity.

Industry observers noted that production schedules across many manufacturing hubs were interrupted by holiday closures, while several firms chose to scale back output due to inventory alignments.

The electricity sector saw one of the steepest declines among the major segments, contracting by 6.9 percent during the month.

Officials attributed this dip to extended monsoon conditions and cooler temperatures, which reduced power consumption across households and businesses. Lower energy demand played a notable role in pulling down the overall index of industrial production.

Mining activity also slowed, registering a 1.8 percent decline in October compared to a smaller contraction of 0.4 percent in the previous month.

Analysts said that weather-related disruptions and transport delays during the monsoon contributed to the subdued output. The mining sector’s slowdown continues to influence supply availability for downstream industries that rely heavily on raw materials.

Consumer durables production, including automobiles, electronics, and household appliances, fell by 0.5 percent in October. This marked a reversal from the strong 10 percent revised expansion seen in September.

Industry experts noted that while festive season sales typically boost demand, manufacturers appeared cautious this year due to uneven consumer sentiment and fluctuating input costs.

The non-durables category, which includes daily-use goods such as packaged food and personal care items, recorded a sharper 4.4 percent decline compared to a revised drop of 0.3 percent in September.

Analysts noted that the slowdown in rural markets, combined with temporary supply chain adjustments, contributed to the contraction in output of essential goods.

Capital goods, considered a key indicator of investment activity, rose by 2.4 percent in October, though this was lower than September’s revised 5.4 percent expansion.

The moderation suggests that while investment demand remains positive, momentum is currently uneven as businesses navigate global uncertainty and domestic cost pressures.

Across the April-October period, industrial output grew 2.7 percent compared with a 4 percent expansion during the same period last year.

Economists expect activity to stabilize gradually in the coming months, supported by government infrastructure spending and improving global conditions.

However, they caution that sustained recovery will depend on demand revival, easing financing costs, and a rebound in exports.

The October data comes at a time when policymakers continue to assess the broader trajectory of India’s economic growth amid global headwinds, volatile commodity prices, and shifting trade dynamics.

While the slowdown reflects temporary disruptions associated with seasonal factors, it also highlights existing challenges faced by industries in maintaining consistent output levels.

Market participants remain attentive to upcoming economic indicators as they assess the medium-term growth outlook for Asia’s third-largest economy.