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The Government on Tuesday reported that growth of factory output, based on Index of Industrial Production (IIP), recorded 4 per cent in September, similar to August print. Growth in the said month was mainly on account of improved performance of manufacturing sector. The latest National Statistics Office (NSO) data showed that the manufacturing sector’s output expanded by 4.8 per cent in September 2025 against 4 per cent in the year-ago month. Mining production contracted by 0.4 per cent against a growth of 0.2 per cent recorded a year ago. Power production rose by 3.1 per cent in September 2025 against 0.5 per cent expansion in the year-ago period. During the April-September period (H1) of FY26, the country’s industrial production grew by 3 per cent compared to 4.1 per cent in the first half of 2024-25. Within the manufacturing sector, 13 of 23 industry groups recorded positive growth in September 2025 compared with September 2024. As per the use-based classification, the capital goods segment grew 4.7 per cent in September 2025, up from 3.5 per cent in the year-ago period. Rajni Sinha, Chief Economist at Care Ratings said that the improvement in growth of consumer durables is encouraging, given that GST rationalisation, income tax reductions, and easing inflation have created a favourable environment for consumption. Among other components, the sustained healthy momentum in growth of infrastructure and construction goods, seen at 10.5 per cent in September (Vs 10.4 per cent in August) has supported the overall IIP growth. “While there has been a sustained push from the government for capital expenditure, the pick-up in private capex remains to be monitored,” she said. “The momentum in industrial growth, particularly in manufacturing and construction-related segments, indicates improving domestic demand and rising capacity utilization amid continued policy support coupled with tax rationalization measures such as targeted GST reduction,” said PHDCCI’s Secretary General and CEO, Ranjeet Mehta. According to, Aditi Nayar, Chief Economist at ICRA, overall, the combination of GST rate rejig, pent-up demand and the early festive onset appears to have boosted demand in September-October 2025, which is expected to augur well for the growth in manufacturing output in October 2025 as well. “While the GST rationalisation may support demand for regular-use/smaller ticket items post the festive season, the sustenance of the buoyancy in demand for big-ticket items remains to be seen,” she said. However, Sinha has some word of caution. “We expect global headwinds arising from tariff-related uncertainties to persist. Going forward, the interaction between domestic developments and external factors will play a crucial role in shaping the trajectory of overall industrial activity in the economy,” she said. Published on October 28, 2025
