India's core sector output experienced a deceleration, registering a 2.9% growth in February 2025, down from 5.1% in January, as reported by the government on Friday. This marks the slowest expansion in five months, attributed primarily to a high base effect.
A detailed analysis reveals that several key sub-sectors witnessed moderated growth compared to the previous month. Coal production increased marginally by 1.7% year-on-year, reaching a six-month low. Crude oil output declined by 5.2%, marking its sharpest fall since May 2021. Natural gas production contracted by 6.0%, hitting a 50-month low, while refinery products saw a modest rise of 0.8%, the lowest in six months.
The core sector, comprising eight infrastructure industries, holds a significant 40% weight in the Index of Industrial Production (IIP), which monitors overall industrial output growth. Given the current trends, India's manufacturing sector performance is anticipated to remain subdued this year, following the double-digit growth recorded in the previous fiscal year.
In specific sub-sectors, steel production growth dipped to a five-month low of 5.4% in February. Electricity generation rose by 2.8%, and cement output grew by 10.5%, down from January's 14.6%. Fertilizer production surged by 10.2%, compared to 3% in the previous month. The cumulative infrastructure output from April to February increased by 4.4%, a slowdown from the 7.8% growth observed in the same period the previous year.