India’s Index of Industrial Production (IIP) is projected to have slowed down to 1.2 per cent year-on-year in April 2025, down from 3 per cent in March, according to a report by Union Bank of India (UBI). The deceleration is largely attributed to weakened activity in the mining and manufacturing sectors. The report highlights that April’s estimated IIP will be significantly below the 5.2 per cent growth recorded in April 2024, indicating a broader slowdown in economic activity across the country, news agency ANI reported. UBI noted that it had anticipated this decline in its March IIP report, citing rising global trade uncertainties during the month, particularly due to reciprocal tariff hikes by the United States- described as the steepest since World War II. “We estimate that around 30 to 35 per cent of the IIP is export-linked, which is expected to face pressure until greater trade clarity emerges,” the report stated. The official IIP data for April is set to be released on May 28, providing a clearer picture of the country’s manufacturing and industrial momentum. High-frequency indicators for April showed mixed trends amid trade and tariff uncertainty. While E-way bill generation and toll collections recorded double-digit year-on-year growth, the automobile sector reported a decline. Additionally, petroleum consumption fell for the third consecutive month. India’s merchandise trade deficit widened sharply to $26.4 billion in April, compared to USD 19.2 billion in the same period last year. Construction-related indicators also showed signs of weakness, with a moderation in steel consumption and cement production. The core sector, which accounts for roughly 40 per cent of the IIP, slowed to an eight-month low of 0.5 per cent YoY in April, down from 6.9 per cent a year earlier. Among the eight core industries, refinery products, fertilisers, and crude oil posted negative annual growth. Though cement, coal, steel, electricity, and natural gas production remained in positive territory, growth was markedly slower than in March. A monthly comparison reveals a contraction in all sectors except natural gas, with double-digit month-on-month declines in coal, refinery products, cement, steel, and fertilisers. The report suggests that aggregate demand remained weak in April, continuing a subdued trend from previous months. Consumer goods production is expected to turn negative, following a flat reading in March, with demand largely urban-driven while rural consumption likely weakened further. Capital goods output may see some improvement due to a favourable base effect, given the low growth of 2.8 per cent in April 2024—a period impacted by reduced government spending amid elections. However, intermediate, infrastructure, and construction goods output is expected to have declined in April, with sharp month-on-month falls in cement (down 16.7 per cent) and steel (down 10.0 per cent) production.
