Boosted by a strong performance in the cement and refinery products sectors, the eight core industries’ output grew by 4.6 percent in January 2025, surpassing the 4.2 per cent growth recorded in January 2024, official data showed.
While cement sector output grew robust 14.5 per cent (sharpest pace in 15 months) on the back of sustained pickup in government capex, refinery products grew 8.3 per cent (fastest since November 2023).
Also, the Commerce and Industry Ministry has now revised upwards the core industries growth of December 2024 to 4.8 per cent from the provisional level of 4 per cent announced last month.
This December 2024 print change was primarily due to sharp upward revision in growth of cement (from 4 to 4.6 per cent), steel (from 5.1 per cent to 7.3 per cent) and electricity (5.1 per cent to 6.2 per cent).
For the April-January 2025 period, the core industries growth came in at 4.4 per cent, sharply lower to the 7.8 per cent growth recorded in same period last fiscal.
Meanwhile, for the month under review, six of the eight core industries recorded positive growth. The two sectors that saw contraction were crude oil (-1.1 per cent) and natural gas (-1.5 per cent).
Growth drivers
The sectors that showed positive growth in January 2025 are coal (4.6 per cent), refinery products (8.3 per cent), fertilizers (3 per cent), cement (14.5 per cent), steel (3.7 per cent) and electricity (1.3 per cent).
The eight core industries — coal, natural gas, crude oil, refinery products, fertilizers, cement, steel and electricity — comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
Commenting on the latest core sector performance, DK Srivastava, Chief Policy Advisor, EY India, said that a slowdown is visible in the growth of coal, steel, cement and electricity output during April 2024 to January 2025.
“This data confirms the message emanating from the National Accounts data, also released today by the NSO, which shows that amongst the GVA sectors, the largest fall comes from the manufacturing sector whose growth fell from 12.3 per cent in 2023-24 to 4.3 per cent in 2024-25,” he added.
Madan Sabnavis, Chief Economist, Bank of Baroda, said that core sector performance for January has been driven by base effects to a large extent.
Cement growth was higher at 14.5 per cent over 4.1 per cent last year with real estate and roads sector having good demand, he said. Electricity growth was muted due to lower levels of business activity, Sabnavis added.
Fertilizer production was muted at 3 per cent over -0.6 per cent as this is the lull season with less demand due to completion of rabi sowing. Demand is normally for non-crops, he said.
Crude oil production
Production fell for crude oil and natural gas due to supply side issues and higher imports. “IIP growth can be expected to be in the range of 4-5 percent based on this growth rate,” Sabnavis added.
Paras Jasraj, Senior Economic Analyst at India Ratings and Research, said that moderation in coal, electricity and steel pulled down core sector growth in January. The coal and electricity output growth at 4.6 per cent and 1.3 per cent was the lowest since September 2024.
“With the high base effect kicking in (February 2024:7.1 percent yoy), Ind-Ra expects the core sector output growth to remain at 3.5 percent year-on-year in February 2025)”, Jasraj added.
