India's Industrial Output Grows 3.1% in September

NEW DELHI (Reuters) – India's industrial output rose 3.1% year-on-year in September, supported by manufacturing activity, according to government data released on Tuesday.

Economists polled by Reuters had expected growth of 2.5%. In August, industrial output contracted for the first time in nearly two years.

Manufacturing output climbed 3.9% year-on-year in September, while electricity generation grew 0.5% and mining activity rose 0.2%. In the previous year, these sectors had seen growths of 5.1%, 9.9%, and 11.5% respectively.

India's manufacturing sector in September bounced back from a 22-month low hit in August, driven by stockpiling ahead of the festive season, as noted by Paras Jasrai, an economist at India Ratings and Research.

India's annual festival season typically spans from late September to early November.

In the April-September period, industrial output increased by 4%, compared to a revised 6.2% a year earlier.

With the early onset of the festive season balancing an unfavorable base, industrial output is projected to grow between 3% and 4% in October, according to Aditi Nayar, an economist at ratings agency ICRA.