In a concerning development for India’s economy, the output of the country’s eight core infrastructure sectors dropped to an 8-month low in April 2025, signaling a potential slowdown in industrial activity and growth momentum.
According to data released by the Ministry of Commerce and Industry, the combined Index of Eight Core Industries (ICI) grew by just 2.6% in April, down sharply from 5.2% growth in March 2025. This marks the weakest performance since August 2024.
What Is the Core Sector?
The core sector represents eight key industries that contribute around 40% of the Index of Industrial Production (IIP). These include:
- Coal
- Crude Oil
- Natural Gas
- Refinery Products
- Fertilizers
- Steel
- Cement
- Electricity
Key Sector-Wise Performance – April 2025
- Crude Oil: Contracted by 1.1%
- Natural Gas: Rose marginally by 2.8%
- Refinery Products: Slowed to 1.5% growth
- Electricity: Increased by just 2.3%, down from 5.9% in March
- Steel: Grew 3.9%, compared to 6.2% in March
- Cement: Declined by 1.7%, a sharp fall from March’s 5.4%
- Fertilizers: Rose 4.3%, offering slight relief
- Coal: Posted a strong 7.4% growth
Why This Matters
A slowdown in the core sector typically leads to weaker industrial production, slower GDP growth, and reduced business confidence. Economists suggest that the April dip could be attributed to lower demand, high inflationary pressure, and global economic uncertainty.
According to analysts, if this trend continues, it may affect the Reserve Bank of India’s monetary policy stance and delay recovery in manufacturing and infrastructure.
Expert Opinion
“The April figures are a red flag. With weak performance in cement and refinery products, it’s clear that industrial demand remains fragile,” said Rajeev Mehta, Senior Economist at ICRA.
“The government may need to revisit infrastructure push and private investment incentives if this trend persists.”
Looking Ahead
The coming months will be critical. The government’s infrastructure spending and the upcoming monsoon season could influence core sector recovery. Policymakers are expected to monitor the data closely before the next fiscal quarter.
Conclusion
The fall in India’s core sector growth to an 8-month low in April 2025 has cast a shadow over the country’s near-term economic outlook. With key industrial sectors underperforming, this dip raises serious concerns for policymakers and investors alike.
Stay tuned for updates on GDP data and policy responses in the coming weeks.
