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India’s Industrial Growth May Slip to 2% in March Amid Manufacturing Weakness
IIP: Industrial production is expected to slow in March due to weakness in the manufacturing and energy sectors. According to a Union Bank report, IIP growth could shrink to 2%. Rising costs, supply constraints, and weak demand are cited as the main reasons for this, while some indicators have also shown improvement.
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%.
