India’s industrial production down 0.4 percent

For the first time in 15 years, India’s industrial output has fallen into negative zone in October as the manufacturing sector has tightened up due to the downward spiral even though the government has announced a series of rescue packages.

Industrial production fell to 0.4 percent which is over 5 percent less than the previous month and 12.2 percent down when compared to 2007.

In a response the government has cut exercise duty on everything except petrol in order to stimulate industrial production and domestic demand whilst Commerce Minister Kamal Nath announced a further stimulus package to be unveiled at the start of the week.

Although both the industrial sector and the economy have been softening economists expected industrial production to have increased to around 2.3 percent but falling exports and dwindling domestic demand has hampered India’s growth rates.

As the figure has undercut estimates, it is fair to say that the situation is deteriorating rapidly as investor confidence has taken a further hit due to the terror attacks in Mumbai that killed 163 people.

Tata Motors Ltd the country’s biggest truckmaker and car manufacturer who recently acquired both Jaguar and Land rover had to stop production at the commercial vehicle factory at the Jamshedpur plant in eastern India for five days, which is the second closure in a month.

Story link: India’s industrial production down 0.4 percent