There exists a general vulnerability within manufacturing and energy which is likely to result in sharp declines in industrial production in March. According to research findings from the Union Bank of India, the IIP growth is expected to decline to around 2% in March from 5.2% recorded in February 2026. The industrial production grew at 3.9% in March 2025.

In addition to this, the manufacturing Purchasing Managers' Index has declined sharply to 53.9 in March from 54.4 in February. The weaker performance in the manufacturing and energy segments has been caused by high input costs and disruptions in supply chain. However, some high-frequency indicators have shown mixed strength.

Furthermore, the country's eight major infrastructure industries, which contribute approximately 40% to the IIP, declined by 0.4% in March, their worst performance in 19 months. This indicates a decline in industrial activity. According to the report, positive growth was observed in the production of natural gas, refinery products, steel, and cement. However, production in the coal, crude oil, fertilizer, and power sectors declined. On a monthly basis, fertilizer production alone recorded a significant decline of 25.9%.

Performance of High-Frequency Indicators: The performance of high-frequency indicators has been mixed. The growth rate of e-way bill generation increased to 12.9% in March. However, this is lower than the 18.8% growth in February. GST revenue growth increased from 8.1% in February to 8.8% in March, indicating improved consumption and better compliance. Toll collections continued to decline.

Sales of all vehicle types increased: March retail sales data showed that rural vehicle demand remained stagnant. Despite this, two-wheeler sales increased by 28.7% and tractor sales by 10.9%. Retail sales of all vehicle types remained strong at 25.3%. However, sales of passenger vehicles, including cars, slowed to 21.5%.

According to the report, fuel consumption trends were mixed. Petrol and diesel consumption increased by 7.6% and 8%, respectively. This was due to precautionary purchases due to fears of supply disruptions caused by the West Asian conflict. However, consumption of petroleum products declined to 2.2% from 5.5% in February. This was primarily due to a sharp decline in demand for aviation fuel due to widespread flight cancellations.

Electricity demand remained at normal levels as above-normal rainfall in the first 25 days of March reduced cooling needs.