India’s Index of Industrial Production (IIP) likely grew 4.3 per cent year-on-year in March 2025, improving from 2.9 per cent in February, according to a report by Union Bank of India.
The report said that the increase in IIP was mainly driven by a pickup in manufacturing and mining activity.
It said, “IIP growth likely rose to 4.3% YoY in Mar’25, from 2.9% in previous month and 5.5% in Mar’24, due to pick up in manufacturing and mining.”
However, the growth in March was still lower than the 5.5 per cent recorded in the same month last year. The report warned that going ahead, industrial growth could come under pressure due to rising global uncertainties.
According to the report, a major reason for the expected slowdown is the recent spike in global trade tensions. In April, the United States imposed steep reciprocal tariff hikes, the highest since World War II, which has led to uncertainty in global trade.
The report estimated that about 30-35 per cent of India’s IIP is linked to exports, and this sector is likely to be affected until there is more clarity on the future of global trade.
Due to the ongoing uncertainty, companies may delay investment decisions, and consumer spending, especially on non-essential goods, may also be hit.
The report also added that the future growth in industrial production will depend on how the global trade situation develops, especially the outcome of tariff negotiations. These will influence key areas such as manufacturing, export performance, and private investments.