India’s Industrial production growth likely to grow 4.3% in March: Union Bank Report

India’s IIP likely grew 4.3% in March 2025, driven by manufacturing and mining, but global uncertainties pose risks.
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India’s Index of Industrial Production (IIP) likely grew 4.3 per cent year-on-year (y-o-y) in March 2025, improving from 2.9 per cent in February, according to a report by Union Bank of India.

. It said, “IIP growth likely rose to 4.3 per cent y-o-y in Mar’25, from 2.9 per cent in previous month and 5.5 per cent 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.The report noted that capital goods production likely slowed in March 2025 because of a high base from last year, when it grew 7 per cent in March 2024. On the other hand, production of intermediate goods and infrastructure or construction-related goods likely improved during the month.

This was supported by higher government spending at the end of the financial year, which led to a sharp month-on-month increase in cement and steel production by 13.8 per cent and 8.6 per cent, respectively. Overall, while March results expected to show better growth in industrial production, risks remain due to global factors.