India’s Industrial Growth Rebounds to 4.3% in March, Driven by Manufacturing and Mining: Union Bank Report

India’s industrial growth, as measured by the Index of Industrial Production (IIP), showed a significant improvement in March 2025, rising to 4.3% year-on-year from 2.9% in February. This growth was primarily driven by increased activity in the manufacturing and mining sectors.

However, the growth in March was still lower than the 5.5% recorded in the same month last year. The report from Union Bank of India highlighted potential challenges ahead, including global trade uncertainties. Recent tariff hikes by the United States, the highest since World War II, have created a ripple effect, impacting global trade dynamics. Since approximately 30-35% of India’s IIP is linked to exports, this sector may face challenges until there is more clarity on global trade policies.

The report also noted that capital goods production likely slowed in March due to a high base effect from the previous year. On the other hand, intermediate goods and infrastructure-related goods showed improvement, supported by increased government spending at the end of the financial year. For instance, cement and steel production saw sharp month-on-month increases of 13.8% and 8.6%, respectively.

While the March results indicate a rebound in industrial production, the report cautioned that future growth will depend on how global trade tensions evolve and their impact on manufacturing, exports, and private investments.