India's index of industrial production fell 0.1 percent on the year in August, weakening sharply from growth of 4.8 percent in July. Within the industrial sector, manufacturing output advanced 1.0 percent on the year after an increase of 4.6 percent previously. More up-to-date PMI survey data published previously indicated that month-over-month growth in the manufacturing sector moderated in August and then slowed further in September. Mining and electricity output fell 4.3 percent and 3.7 percent on the year respectively in August.

The Reserve Bank of India again left policy rates on hold at 6.50 percent at their most recent meeting held earlier in the week, with officials expressing confidence in the resilience of economic activity. Officials also advised that they are shifting their policy stance from"the withdrawal of accommodation" to"neutral". This, they judge, will provide them with greater flexibility in upcoming meetings while enabling them to continue monitoring the path of disinflation.

India's industrial production is expected to post a slower 1.6% rise on year in August after accelerating to an above-forecast 4.8% gain in July from growth of 4.2% in June.

Industrial production measures the physical output of the nation's factories, mines and utilities. Data are not seasonally adjusted and the main is on the annual growth rate of total industrial production and, within that, manufacturing output. The report is usually released around six weeks after the end of the reference month.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

The index is a quantitative index with the production of the items being expressed in physical terms. The Index is compiled by taking into account the quantities of items produced during the current month, compared with the average monthly production in the base year. Selection of items is based on the total production of the items as the primary (main) product as well as secondary (by) product. Data are available monthly within six weeks of reference month.