The first of several key indicators due out this week, the boost in manufacturing output provides a strong sign that India's slowing economy may be poised for a turnaround.
The index of industrial production (IIP) grew 8.2 percent annually in October, data released by the Central Statistics Office showed on Wednesday, well above the 4.5 percent forecast by a Reuters poll.
October factory and mine output showed the strongest growth since June 2011, after IIP growth spent most of this year close to, or below zero percent. However, the industrial index is a volatile indicator that often lurches violently.
Economists said the rebound was largely due to a low base a year earlier, when religious festivals closed factories.
However, that may bolster the central bank's claims that there is no need for an interest rate cut, the agency said. Continued high inflation levels, reported on Wednesday at 9.9 percent in November, will likely encourage the bank to hold fast at its next policy meeting on December 18 as well.