India’s core sector growth – across eight industries – slowed down to a nine-month low of 0.7 per cent in May, indicative of a dip from the 1 per cent in the previous month, according to provisional numbers released by the government on Friday.
May 2024 core sector growth stood at 6.9 per cent, while April 2025 growth was revised upward 0.5 per cent to 1 per cent.
These eight core industries—coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity—comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
According to Rahul Agrawal, Senior Economist at ICRA Ltd, the core sector’s performance remained lacklustre in May 2025. Excess rains in the latter part of the month, owing to the early onset of the monsoon, likely weighed on the performance of the electricity and some of the mining sectors in the month.
“However, the sequential performance of the steel, cement, refinery products and crude oil sectors improved in May 2025 vis-à-vis April 2025, partly offsetting the deterioration in the performance of the other sectors,” he said.
“Given these trends, ICRA expects the IIP growth to print at ~1.5-2.5% in May,” Agrawal said.
Sectoral Performance
Production in three of the eight sectors—refinery products, steel, and cement—reported a sequential rise in May.
Steel production increased by 6.7 per cent in May, up from 4.4 per cent in April.
Cement production, too, reflected a similar picture. It increased by 9.2 per cent in May, up from 6.3 per cent in April.
Refinery production contracted by 4.5 per cent in April, compared to a 0.2 per cent growth registered in March; it increased by 1.1 per cent in May.
Coal production rose by 2.8 per cent in May, but was lower than the April growth of 3.5 per cent.
Sequential Contraction
Electricity generation saw a sequential contraction of 5.8 per cent, as against April, when it increased by 1.7 per cent.
Crude oil production contracted by 1.8 per cent in the previous month, as against a contraction of 2.8 per cent in April.
Fertiliser production contracted by 5.9 per cent last month, compared to April’s numbers, when contraction was 4.2 per cent.
Natural Gas production decreased by 3.6 per cent in May, compared to the 0.9 per cent contraction in April.