Core sector growth slows to 8-month low of 0.5% in April

The combined index of eight core industries increased by 0.5% year-on-year in April 2025, according to data released by the Ministry of Commerce & Industry on Tuesday.

Growth hasn’t been this low since August 2024, when these sectors posted a collective contraction of 1.5%.

Five out of India’s eight key industries experienced growth in April 2025, while output in crude oil, petroleum refining, and fertiliser sectors declined. Cement, coal, steel, electricity and natural gas production recorded positive growth.

The index of eight core industries measures the combined and individual performance of production of eight core industries such as coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

The moderation occurred following the unprecedented tariffs declared by U.S. President Donald Trump on April 2, targeting all trade partners. These tariffs sparked widespread uncertainty among exporting nations, though they were suspended for a 90-day period just one week later.

In April 2025, growth in coal, natural gas, steel, and electricity output slowed to 3.5%, 0.4%, 3%, and 1%, respectively.

On the other hand, cement production surged by 6.7% in April, a significant jump from just 0.2% in the same month a year earlier.

Commenting on the data, Aditi Nayar, Chief Economist at ICRA, said the core sector's performance had “weakened substantially” in April.

“Given the modest increase in core sector output and trends in other key short-term indicators, ICRA anticipates that the Index of Industrial Production (IIP) growth will slow sharply to around 1% in April,” she noted.

The eight core industries—coal, crude oil, petroleum products, natural gas, steel, cement, electricity, and fertilisers—had clocked a 6.9% growth in April 2024. In comparison, these sectors had registered a 4.6% increase in output in March 2025.

Earlier in May, India's retail inflation, measured by the Consumer Price Index (CPI), eased to 3.16% (provisional) in April, down 18 basis points from 3.34% in March, marking the lowest monthly inflation rate since July 2019, when it stood at 3.15%. At this rate, the retail inflation remains within the RBI's medium-term target of 4% for the third consecutive month; the retail inflation was 3.61% in February.