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Below the Perspective on IIP Data by Ms. Rajani Sinha, Chief Economist, CareEdge Ratings 

Growth in India’s industrial production slowed to 1.5% in June, as compared to an upwardly revised 1.9% in May. A marginal pickup in the manufacturing sector growth was more than offset by contraction in both the mining and electricity sector output. IIP growth has remained relatively subdued in the recent months with Q1FY26 growth seen at 2%, lower compared to 5.4% in the same quarter last year.

 On the investment front, infrastructure and construction goods posted a healthy 7.2% growth in June (Vs 6.7% in May). While private capex is yet to show meaningful traction, public capex continues to remain encouraging. However, persistent global uncertainties are weighing on the overall investment sentiment.

 On the demand side, signals remain mixed. Output of consumer non-durable goods continued to remain weak, staying in the contractionary zone for five consecutive months, while output of consumer durable goods improved. Urban consumption, in particular, remains lagging. Nonetheless, consistent easing of inflation, a favourable monsoon, and recent policy rate cuts by the RBI are positives for the consumption scenario going forward. Against this backdrop, both demand and investment trends will need to be watched closely in the coming months.

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