File photo: Kher said India's Patent Law was compliant with the rules of the World Trade Organization and the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Still, India was ready to discuss the issues with Washington.

New Delhi - India's industrial production slid by an unexpected 1.9 percent in February, data showed Friday, underscoring the the huge economic revival challenge facing the new government that emerges from elections now under way.

The tumble in output in February from India's mines, factories and utilities from the same month a year earlier surprised analysts, who had expected a 0.9 percent rise.

Manufacturing output, accounting for over three-quarters of the Index of Industrial Production, slid by 3.7 percent in February.

Output of capital goods, such as plant equipment - a strong harbinger of investment intentions - plunged 17.4 percent.

“There is little on the horizon likely to lift demand or production,” said Moody's Analytics analyst Glenn Levine.

But he held out hope that when a new government takes charge it could announce “fresh policies to boost” Asia's third-largest economy.

Despite weak data, investors have been racing to put their money in India amid hopes voters will elect the Hindu nationalist Bharatiya Janata Party (BJP), which has been leading in opinion polls and is perceived as more investor-friendly than the left-leaning Congress.

The BJP, whose prime ministerial candidate Narendra Modi is chief minister of prosperous Gujarat state, has promised in its manifesto to restore confidence in the “India story domestically as well as internationally”.

Growth in January's output was revised upward to 0.9 percent from 0.1 percent.

Global ratings agency Fitch in a separate statement upheld India's prized investment credit rating but added the economy had lost “much of its dynamism”.

The economy's stumbling has disappointed Congress, whose last term was marred by corruption scandals, high inflation, elevated interest rates and slowing growth.

It had hoped “green shoots” of recovery would be visible before election voting began earlier in the week.

Modi, 63, viewed as controversial because of his government's failure to swiftly subdue deadly anti-Muslim riots in 2002 in Gujarat, insists only he can turn India back into an investment magnet.

Congress has been campaigning on the record of its welfare programmes - from subsidised food to guaranteed work - and has said it will legally entrench the poor's right to health care and housing.

The government has estimated the economy grew by 4.9 percent in the financial year which ended March 31, but many economists expect expansion to be in the low four-percent range.

The economy expanded by 4.5 percent the previous year, just half the blistering rate recorded in the so-called “Indian summer” of earlier years.

Voting in India's mammoth five-week election ends May 12 with results due four days later.

In other grim tidings, India's trade deficit widened to a five-month peak of $10.5 billion in March from $8.1 billion in February while exports fell for a second consecutive month.

India's central bank has kept interest rates high to fight crippling consumer price inflation of 8.1 percent.

Chandrajit Banerjee, director general of the influential Confederation of Indian Industry, called the data “extremely disappointing” and much below India's potential.

Evidence of the manufacturing slowdown was highlighted by a separate announcement that domestic sales of India's once-booming passenger car segment shrank for a second year, falling by 4.65

percent, hit by weak consumer confidence and high borrowing costs.

The Society of Indian Automobile Manufacturers' (SIAM) president Vikram Kirloskar said the sector hoped for a “moderate improvement” with a new government but he gave no precise forecast, except to say sales growth this year should be “more than zero percent”.

“We hope it's the end of our winter of discontent,” he told reporters. - Sapa-AFP