India's Index of Industrial Production (IIP) Records 3.2% Growth in December 2024

India's Index of Industrial Production (IIP) Records 3.2% Growth in December 2024 🚀

Ministry of Statistics & Programme Implementation | Azadi Ka Amrit Mahotsav

Posted On: 12 February 2025 | Source: PIB Delhi

📝 Overview:

India’s Index of Industrial Production (IIP) grew by 3.2% in December 2024, compared to 5.2% in November 2024, signaling a moderation in industrial output. The IIP measures sector-wise industrial performance and reflects trends in manufacturing, mining, and electricity production.

📊 Sectoral Performance Highlights (December 2024):

✅ General IIP: 157.2 (vs. 152.3 in Dec 2023)  3.2% growth (Slower than Nov 2024: 5.2%)

✅ Mining: 143.1 (vs. 139.5)  2.6% growth (Weakened due to lower coal output)

✅ Manufacturing: 156.2 (vs. 151.6) 3.0% growth (Boosted by metal and electrical equipment production)

✅ Electricity: 192.8 (vs. 181.6) 6.2% growth (Driven by renewable energy projects and thermal output)

🏭 Top Performing Industries (Manufacturing):

Out of 23 industry groups, 16 recorded positive growth, led by:

📈 1. Manufacture of Electrical Equipment: +40.1% (Highest contributor)

Key drivers: Electric heaters, small transformers, and optical fiber connectors.

Reason for growth: Increased demand for 5G infrastructure and renewable energy projects.

📈 2. Manufacture of Basic Metals: +6.7%

Top items: Steel blooms, galvanized products, pipes, and tubes.

Reason for growth: Strong demand from the construction and auto sectors.

📈 3. Manufacture of Coke & Refined Petroleum Products: +3.9%

Key items: Diesel, Aviation Turbine Fuel (ATF), and Naphtha.

Reason for growth: Higher fuel demand from the aviation and logistics sectors.

📊 Use-Based Classification Insights:

The IIP by use-based classification reveals trends in industrial demand and output:

✅ Primary Goods (157.7): +3.8% (Supported by steady mining and electricity output)

✅ Capital Goods (114.5): +10.3% (Strong private sector capex and infrastructure push)

✅ Intermediate Goods (169.3): +5.9% (Higher demand from downstream industries)

✅ Infrastructure/Construction Goods (191.7): +6.3% (Government's infra spending boosts demand)

✅ Consumer Durables (124.0): +8.3% (Improved urban demand and festive sales)

❌ Consumer Non-durables (166.0): -7.6% (Weak rural demand and lower FMCG sales)

🛠 Industry-Wise Growth Trends (2-Digit NIC Level):

Top Gainers:

📌 Electrical Equipment: +40.1% (Boosted by energy transition projects)

📌 Furniture Manufacturing: +22.1% (Increased demand from real estate growth)

📌 Fabricated Metal Products: +9.4% (Industrial capex recovery)

📌 Machinery & Equipment: +10.5% (Capex cycle revival)

Key Declines:

⚠ Pharmaceuticals: -9.5% (Lower exports and price pressures)

⚠ Food Products: -5.5% (Weak agri-output and demand)

⚠ Leather Products: -7.0% (Export market challenges)

⚠ Printing & Media: -9.2% (Digital transition impact)

📈 Cumulative Performance (April – December 2024):

Overall IIP: +4.0% (vs. 6.3% last year)

Mining: +3.3% (vs. 8.5% last year)

Manufacturing: +4.0% (vs. 5.7% last year)

Electricity: +5.4% (vs. 7.0% last year)

Capital Goods: +5.1% (signaling a robust investment cycle)

Infrastructure Goods: +6.1% (reflecting government-led growth)

🚨 Key Insights and Analysis:

✅ Positive Indicators:

Capital Goods (10.3%) & Infrastructure Goods (6.3%) growth signals a strong investment cycle driven by Make in India and PLI schemes.

Electrical Equipment (40.1%) surge highlights India’s energy transition and 5G rollout impact.

Consumer Durables (8.3%) rebound reflects urban consumption recovery.

⚠ Concerns and Risks:

Consumer Non-durables (-7.6%) slump reflects rural distress and lower FMCG demand, a key signal for weak household spending.

Mining (2.6%) growth slowdown due to lower coal and iron ore output may impact core industries.

Pharmaceuticals (-9.5%) decline highlights export competitiveness challenges.

🏦 Economic Outlook & Future Trends:

📊 Government Spending Boost: Strong performance in capital goods and infrastructure goods indicates that government-led projects continue to drive growth.

📊 Consumption Gap: Divergence between consumer durables and non-durables shows that while urban spending recovers, rural markets remain under pressure.

📊 Manufacturing Focus: Policies like Production-Linked Incentive (PLI) and Aatmanirbhar Bharat are reviving industrial production, but more support is needed for SMEs and export-oriented sectors.

📅 Next Update:

The IIP for January 2025 will be released on 12 March 2025.

📊 Source: Ministry of Statistics and Programme Implementation (https://mospi.gov.in)

📌 Key Takeaways for Investors & Businesses:

✅ Watch for growth in capital goods and infrastructure-linked companies.

✅ Track FMCG and non-durable sectors for rural demand recovery.

✅ Focus on sectors benefiting from energy transition and digital infrastructure.

✅ Expect policy support for export-oriented sectors like pharma and leather.

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