India’s economy is showing signs of picking up steam as GST changes gear up to spark more spending during the upcoming festive season. Economists predict this could give manufacturing a real lift in September and October 2025, once shops clear out old stock.
The latest Index of Industrial Production (IIP) data points to steady 4 percent growth in August 2025. Mining activity bounced back with year-on-year gains after four quiet months, while electricity generation hit a five-month high.
Aditi Nayar, chief economist at ICRA, highlighted how primary goods output sped up to 5.2 percent—its best in seven months—thanks to stronger mining and power trends. Still, the other main categories slowed down compared to July.
The infrastructure and construction side shone bright, jumping 10.6 percent year-on-year in August. Big government projects in highways, railways, and ports fueled this surge, keeping investment momentum alive.
In manufacturing, just 10 out of 23 key groups saw growth over last August. On investments, infrastructure goods kept climbing at 10.6 percent, driven by public spending. Private investment, though, stays cautious amid global jitters.
Rajani Sinha, chief economist at CareEdge Ratings, says watching consumer trends will be crucial. “GST reforms should give demand a welcome boost right before the festive rush,” she noted. Add in income tax cuts, cooling food prices, and potential RBI interest rate reductions, and the stage is set for stronger buying.
Sinha added that a pickup in homegrown demand, despite tough global conditions, could finally nudge private companies to invest more and push overall IIP growth higher.
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