NEW DELHI: India’s economic woes worsened yesterday with a surprise contraction in industrial production and a wider trade deficit, adding to troubles of the ruling alliance as it heads into a tough national election seeking a third term.

Production at factories, mines and utilities shrunk for the second straight month in November, by 2.1 per cent, data from the Statistics Ministry showed, dragged down by a contraction in consumer goods output.

Analysts polled by Reuters had predicted output to grow 1pc.

“The November industrial production figures continue to show that the Indian industrial sector remains in recession, with clear evidence that domestic consumption remains weak,” wrote Rajiv Biswas, Asia-Pacific chief economist at His.

Meanwhile, the trade deficit widened to $10.14 billion last month from $9.22bn in November on waning exports growth, data from the Trade Ministry showed yesterday.

Merchandise exports rose 3.49pc year-on-year to $26.35 billion, slowing down from a 5.86pc pace in November.

The second successive fall in the output and slowing exports growth will likely dampen hopes for a rebound in Asia’s third-largest economy that is struggling to come out of a situation that some analysts define as stagflationary. For the past four quarters, economic growth has been stuck below 5pc while prices are rising.

Strong exports along with a robust farm output were expected to usher in an economic revival, beginning in the October-December quarter.

The latest data may make investors more wary of committing fresh investments in an economy that recorded 9pc annual expansion until two years back and was widely expected to be one of the main drivers of the global economic recovery.