India IIP likely slowed to 2%

India’s industrial output growth likely slowed sharply to 2% in March, according to a Union Bank of India estimate published a day before the official release. (thehindubusinessline.com) The estimate would mark a drop from 5.2% in February and from 3.9% in March 2025 in the Index of Industrial Production, India’s monthly gauge of factory, mining and power output. (thehindubusinessline.com) Union Bank said the drag came from broad weakness in manufacturing and energy, with higher input costs and supply disruptions squeezing margins and demand. The bank also pointed to softer exports. (thehindubusinessline.com) (webindia123.com) A key signal came from the eight-core sector, which makes up nearly 40% of the industrial index. It contracted 0.4% in March after revised growth of 2.8% in February, the weakest reading in 19 months. (thehindubusinessline.com) Within that core basket, natural gas, refinery products, steel and cement still grew from a year earlier, but coal, crude oil, fertilisers and electricity fell. Fertiliser output dropped 25.9% from February on a month-to-month basis. (thehindubusinessline.com) Other high-frequency indicators were mixed. E-way bill generation grew 12.9% in March, down from 18.8% in February, while goods and services tax revenue growth edged up to 8.8% from 8.1%. (thehindubusinessline.com) Fuel demand also split in different directions. Petrol and diesel consumption rose 7.6% and 8.0%, but overall petroleum use slowed to 2.2% from 5.5% as aviation turbine fuel demand fell during widespread flight suspensions. (thehindubusinessline.com) Factory sentiment weakened too: the manufacturing Purchasing Managers’ Index slipped to 53.9 in March from 56.9 in February, its lowest level since June 2022. Services PMI also eased to 57.5 from 58.1. (thehindubusinessline.com) The official March industrial output print is scheduled for April 28 under the Ministry of Statistics and Programme Implementation’s faster release calendar. Since April 2025, the ministry has published IIP data 28 days after the reference month instead of 42. (mospi.gov.in) (economictimes.indiatimes.com) The broader backdrop is less forgiving than India’s headline growth story suggests. The International Monetary Fund said in its April 2026 outlook that the Middle East war and resulting energy shock are raising inflation and weakening external balances across Asia. (imf.org 1) (imf.org 2) That makes Monday’s official IIP release more than a routine data point: it will show whether March was a brief soft patch or an early sign that higher energy costs are reaching India’s factories. (mospi.gov.in) (thehindubusinessline.com)