India’s industrial recovery faced a significant cooling period at the close of the fiscal year. The Index of Industrial Production (IIP) grew by 4.1% in March 2026, according to official data released on Tuesday. This marks a deceleration from the 5.1% growth recorded in February, hitting its lowest level since October 2025.

The primary weight on the index came from a sharp slowdown in the electricity sector. Power generation grew by a marginal 0.8% in March, a fall from the 7.5% expansion seen in the same month last year. Unusual weather patterns and high base effects could have contributed to this near-stagnation in energy demand.

Manufacturing and Mining Resilience

Despite the overall moderation, core industrial pillars remained steady:

• Manufacturing: The sector recorded a growth of 4.3%, supported by strong performance in "basic metals" and "motor vehicles."
• Mining: This was the month’s standout performer, rising 5.5% compared to a meagre 1.2% in March 2025.

Fiscal Year Wrap-Up

For the full fiscal year 2025-26, India's cumulative industrial output stood at 4.1%, marginally higher than the 4% recorded in the previous year. Under the use-based classification, "infrastructure and construction goods" showed continued strength, reflecting the government's sustained push on capital expenditure.

However, the consumer durables segment showed signs of fatigue, indicating that rural and urban demand for high-value items may be stabilizing. As the new fiscal year begins, all eyes remain on private consumption and global energy prices.