Industrial production contracted by 0.4 percent in October after expanding by 12.
2 percent in the same month a year earlier, government figures showed. Output grew by a revised 5.45 percent in September.
Industrial production has been falling in Asia's third-largest economy as a result of the worldwide economic downturn but analysts had been expecting output growth in October of at least two percent.
"The industrial sector and indeed the economy as a whole has been softening for some time and the situation is deteriorating more rapidly now," said HSBC economist Robert Prior-Wandesforde.
Until recently India believed it would escape the brunt of the global financial turmoil thanks to its vast domestic market of more than 1.
1 billion people and relatively small exposure to world trade.
But a slew of data has shown its economy fast losing steam.
Output turned negative as Indian companies worked off inventories built up in anticipation of October's normally free-spending religio