India’s industrial output growth slowed to 2.9% in February, marking a noticeable deceleration compared to previous months. The moderation was primarily driven by a weaker performance in key sectors such as manufacturing, mining, and electricity. According to the Index of Industrial Production (IIP) data, the manufacturing sector, which holds the largest weight in the index, recorded a subdued expansion, reflecting lower factory activity and softer demand conditions. Mining and electricity generation also posted moderate growth rates, contributing to the overall slowdown.

The February figures show a significant decline compared to earlier expectations and indicate that industrial momentum remains uneven despite broader economic recovery signals. Analysts attribute the slower growth to a combination of factors, including global uncertainties, rising input costs, and cautious consumer spending, which together dampened production activities across various industries. On a use-based classification, consumer goods, capital goods, and infrastructure-related goods also witnessed mixed trends, highlighting the persistent challenges in demand revival across sectors.

Despite the dip, the overall industrial growth for the first eleven months of the fiscal year remains positive, offering some optimism that the broader manufacturing ecosystem is still on a path to recovery. However, the February slowdown underscores the need for sustained policy support, easing of financial conditions, and measures to boost domestic consumption and investments to maintain a steady industrial growth trajectory going forward. The performance of the industrial sector in the coming months will be crucial in shaping the overall economic outlook for the year.