India's industrial output rose 6.4 per cent in February due to strong manufacturing sector growth despite fears that the country's worst drought in 15 years could lead to a demand slowdown in Asia's third-largest economy.

Figures released by the government's Central Statistical Organisation on Thursday said output was up from 2.4 per cent in February 2002 when a global and domestic slowdown hit demand.

Output has been maintaining a steady pace over the past few months with industrial output rising 6.4 per cent in January and 5.0 per cent in December 2002.

Industrial output in the first 11 months of 2002-03 (April-March) rose a healthy 5.7 per cent compared with 2.6 per cent in the same period the previous year.

Manufacturing, which accounts for about 80 per cent of industrial output, jumped 6.5 per cent in February compared with 2.9 per cent in the same month a year earlier.

Industry forms 27 per cent of GDP but contributes a large chunk to government revenues because the vital agricultural sector is untaxed.

The capital goods sector grew 9.9 per cent in February compared with 1.1 per cent in the year-ago period.

Consumer non-durables, which range from shoes to shampoos, rose 11.1 per cent in February, up from 2.6 per cent in the same month in the previous year.

The Indian economy, the world's 12th largest, is estimated to grow at 4.4 per cent in 2002-03, down from 5.6 per cent in the previous year because of a decline in farm output.

The farm sector was hit by scanty monsoon rains, a key influence on the country's economic performance. Nearly 70 per cent of India's more than one billion people depend on agriculture for a living.