Key Points

According to the report, the country's IIP is expected to stay significantly lower than the 5.2 per cent of April 2024, indicating a "slowdown in economic activity" in the Indian economy.

"We had flagged a potential sharp slowdown in April IIP numbers in the March data report (IIP March 2025) due to a spike in global trade uncertainty during the month on reciprocal tariff hikes by the US (the highest since WWII)," the report added.

"We estimate that at least 30-35% of the weight in IIP is attributed to exports, which is likely to come under pressure till some trade clarity is achieved," the report further added.

The Industrial Production data for April will be released on May 28, offering insights into the country's manufacturing momentum and economic activity.

Pointing out the factors behind its anticipation, the report says that the high-frequency indicators showed mixed trends in April current year, amid high trade and tariff-related uncertainty.

It says the latest RBI Bulletin says that while E-way bills and toll collections recorded double-digit YoY growth in April, the automobile sector witnessed a slowdown.

Also, petroleum consumption declined for the third consecutive month. Merchandise trade deficit widened to USD 26.4 bn in April from USD 19.2 bn the previous year.

Construction sector indicators, namely steel consumption and cement production, witnessed a moderation in April 2025.

The report says that the core sector, which has close to a 40 per cent contribution to the IIP, slowed to an eight-month low of 0.5 per cent YoY in April, compared to 6.9 per cent registered in the same period last year.

While refinery products, fertilisers and crude oil showed negative YoY growth, the production of cement, coal, steel, electricity and natural gas recorded positive growth in April, even as it slowed very sharply compared to March.

On a monthly basis, except for natural gas, all seven other sectors showed contraction, with coal, refinery products, cement, steel and fertilisers registering double-digit negative growth.

The report says that recovery in aggregate demand may have continued to remain weak in Apr 25 IIP, as was witnessed in previous months.

The overall consumer IIP is expected to slip into the negative zone from a flat reading in March, the report anticipated.

It further added that consumption demand may be primarily led by urban demand, while rural demand may have weakened further in April.

Furthermore, the report adds that capital goods IIP growth is expected to have improved in April as compared to the previous month due to favourable base effects (2.8 per cent in April 2024) as 2024 lags behind government spending during elections.

The UBI says that intermediate, infrastructure, and construction goods may have worsened in April compared to the previous month due to the fall in cement (-16.7 per cent MoM) and steel (-10.0 per cent MoM) production in April 2025.

- ANI