Page 13 - Policy Economic Report - December 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Index of Industrial Production (IIP)
IIP measures growth in manufacturing, mining, and electricity, reflecting the strength of industrial activity.
India’s IIP registered a robust growth of 4.0 % year on year in September 2025, driven primarily by a 4.8
% expansion in the manufacturing sector. A rising IIP signals robust production, higher employment, and
stronger investment momentum, reinforcing the economy’s overall growth trajectory.

Top three positive contributors responsible for the strong performance are from the manufacturing
sector. The performance underlines the strength of India’s industrial base and its capacity to contribute
meaningfully to the broader growth agenda.

• Manufacture of Basic Metals (growth of 12.3 %),

• Manufacture of Electrical Equipment (growth of 28.7 %), and

• Manufacture of motor vehicles, trailers, and semi-trailers (14.6%)

From a use-based classification perspective, several categories posted commendable growth. The top
three contributors are: Infrastructure & Construction Goods expanded by 10.5 %, Consumer Durables
by 10.2 %, and Intermediate Goods by 5.3 % in September 2025. Such diversified growth across primary
goods, capital goods, intermediate goods, and consumer durables segments signal both strong investment
activity and resilient consumption demand. In combination with manufacturing gains, these patterns
reflect a well-balanced industrial upturn that strengthens the foundation for sustained, inclusive
economic expansion.

Inflation in India

• Headline inflation-: Year-on-year inflation rate based on All India Consumer Price Index (CPI) for
the month of November, 2025 over November, 2024 is 0.71% (Provisional). There is increase of
46 basis points in headline inflation of November, 2025 in comparison to October, 2025.

Figure 9: Year on year inflation rate based on CPI

Source- NSO Page | 12

November 2025