At 4%, India’s fiscal 2025 average of Index of Industrial Production (IIP) is at its lowest in the past four years, marking a slowdown in industrial activity. This could be attributed to uncertainties in the global economic outlook leading to tepid goods exports growth, lower than expected consumption demand growth, and a dip in private capital expenditure. While the monthly barometer of the nation’s industrial output, the IIP, grew in March to 3% from February’s 2.7%, this has been mainly on account of a rise in power production, which cyclically peaks in summer. Power output growth almost doubled between February (3.6%) and March (6.3%). But the fall in the IIP, from 5.9% (2023-24) to 4% (2024-25), warrants a closer look at the sectors that have lagged. While mining steeply declined from 7.5% (FY24) to 2.9% (FY25), manufacturing followed with 5.5% (FY24) and 4% (FY25) and electricity at 7% (FY24) and 5.1% (FY25). What is more significant is the degrowth of -1.6% in fiscal 25 witnessed in consumer non-durables from 4.1% in the previous year. Contrasting this with the growth almost doubling in consumer durables from 3.6% (FY24) to 8% (FY25) likely indicates an uptick in urban private consumption, while lingering effects of high food inflation in the October to December quarter of the last fiscal continue to strain rural consumption. Sure, retail inflation was at its lowest in six years at 4.6% in FY25, aided by steep falls in vegetable prices in the last quarter, but this also heavily impacted farm incomes, further straining rural consumption. While a decrease in the RBI’s bank lending rate to 6% in April from 6.5% in January has led to lower capex lending rates across banks, an uncertain economic and trade environment is unlikely to encourage the private sector to raise investment, without substantial domestic consumption impetus from the government.