Industrial production rose 6.7% year-on-year, a 25-month high, snapping a slowdown seen in recent months, data showed. Manufacturing output shot up 8%, the fastest pace in more than two years, from just 2% in October.
The revival follows the Index of Industrial Production (IIP) slumping to a 14-month low of 0.5% in October.
“These numbers provide anecdotal evidence that GST rationalisation has pushed demand in the economy,” said Devendra Kumar Pant, chief economist at India Ratings and Research. “Coupled with low inflation, this should continue to support consumption.”
A simplified GST with a twoslab structure of 5% and 18% took effect September 22, cutting rates on several household items to boost demand. Economists, however, cautioned that a part of the November spike may be due to temporary factors. “The upswing largely reflects the festive calendar shift, restocking after festival sales, and some normalisation in mining and electricity output after excess unseasonal rains,” said Aditi Nayar, chief economist at Icra.
Barclays’ India chief economist Aastha Gudwani said the fading impact of fewer working days in October because of festivals also aided the rebound.
Adjusting for festival timing, IIP growth averaged 3.6% in October-November, slower than the 4.3% expansion in the second quarter of FY26, largely due to weakness in electricity generation. Electricity output contracted 1.5% in November, though it improved from a 6.9% decline a month earlier. Mining output expanded 5.4% after shrinking in October.
Manufacturing breadth improved, with 20 of 23 industry groups posting growth. Basic metals, pharmaceuticals and automobiles were the biggest contributors.
All six use-based categories expanded for the first time in nine months. Infrastructure and construction goods led with 12.1% growth, followed by capital goods at 10.4%, reflecting continued government spending. Consumer durables and non-durables rose 10.3% and 7.3%, respectively. “The rise in non-durables suggests inventories have been exhausted and demand is expected to continue,” Pant said. Risks persist in the form of trade barriers. “The impact of US tariffs and penalties could weigh on some manufacturing segments,” Nayar warned.
Icra expects industrial growth to moderate to 3.5-5% in December as base effects normalise. Pant cautioned against declaring a sustained recovery, noting that past spurts above 5% have often faded after a few quarters.