However, the February IIP print was a tad lower than the 7.4 percent recorded in January 2018.
The monthly decline in manufacturing output was the first since March 2017.
Manufacturing output, which was a bright spot previous year thanks to the strong global economy, fell 0.2 percent month-on-month in February after a downward revision showed it stagnated in January, the Office for National Statistics said.
During April-February, IIP growth has slowed to 4.3 per cent from 4.7 per cent in the same period last fiscal.
British manufacturing output fell unexpectedly in February, its first drop in nearly a year, according to official figures that added to signs the economy may have slowed in the first quarter. The IIP recorded a growth of 8.54 per cent in November, 7.1 per cent in December and 7.4 per cent in January, as per the revised data.
Manufacturing output was 2.5 percent higher than its level in February 2017, again less than the 3.3 percent Reuters poll consensus.
Capital goods output, which is a proxy to measure private sector investment activity, was 20 percent in February compared with 14.6 percent in January. Electricity generation also grew by 4.5 per cent compared to 1.2 percent.
The ONS also released figures for construction output in February which showed a 1.6 percent drop after a 3.1 percent plunge in January - confounding the consensus expectation for a 0.7 percent increase on the month.
Among the six use-based classification groups, the output of primary goods which has the highest weightage of 34.04 grew by 3.7 per cent. The consumer non-durables sector recorded a growth of 7.4 per cent.
The inflation based on the Consumer Price Index (CPI), a key data factored in by the Reserve Bank of India (RBI) to arrive at interest rate, was 4.44 percent in February.
However, the weather-related hit to the economy may be temporary, with spending in the first quarter pushed back until the second quarter in what is expected by some economists to provide an equal boost to the economy. The rate of price rise in the protein rich items like eggs, milk and other products too moderated in March as against the previous month. Overall, inflation in the food basket was 2.81 per cent, lower than 3.26 per cent in February.