India's industrial output grows at fastest rate in four months in February

Employees assemble different parts onto car panels at an assembly line inside the manufacturing plant of Renault Nissan Automotive India in Oragadam in the southern state of Tamil Nadu, India

India's industrial output grew at the fastest annual rate in four months in February, increasing 5.7% compared with the same month last year, government data showed on Friday.

Economists polled by Reuters had estimated year-on-year growth of 6% in February. Annual industrial output growth for January was revised to 4.1% from 3.8%.

Manufacturing output in February rose 5% year on year, slower than the 5.9% rise posted in the same month last year.

Electricity generation in February was up 7.5%, against 8.2% growth in the same month a year ago. However, mining activity increased, expanding by 8% versus a 4.8% rise a year earlier.

Production of infrastructure goods grew 8.5% year on year as against 9% growth in the same month last year. Capital goods expanded by 1.2% versus an 11% increase a year ago.

Output of consumer durables, such as automobiles, fridges and washing machines, rose 12.3% in February, compared with an annual contraction of 4.1% in the same month last year.

Consumer non-durables, contracted 3.8% year on year against 12.5% growth recorded in the same month last year.

Industrial output in the first 11 months of the fiscal year, which started in April 2023, was up 5.9%, against a 5.6% rise in the same period a year earlier.

Output was in line with expectations, said Aditi Nayar, an economist at ICRA, adding that high-frequency indicators suggest softening economic activity in March may lead to an annual industrial output rise of 4.5%-5.5%.