India’s core sector growth took a hit in May 2025, climbing just 0.7% compared to the same month last year. That’s the slowest pace in the last four months. The drag came mainly from a dip in crude oil and natural gas output.
This data, released by the Ministry of Commerce and Industry, covers the Eight Core Industries, which together make up over 40% of the Index of Industrial Production (IIP).
Let’s break it down.
Winners: Cement, Steel, Coal Keep the Engine Running
Some sectors did manage to stay strong.
- Cement was the star performer, growing 9.2% year-on-year. Its April–May cumulative growth stood at 7.8%.
- Steel followed with a 6.7% rise in May, and 5.5% growth in the two-month period.
- Coal production was also up by 2.8%, continuing its role in powering India’s energy needs.
- Refinery products saw a small but steady 1.1% growth in May.
These sectors helped keep the overall index from slipping into the red.
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Losers: Crude Oil, Gas, Electricity Pulling Us Back
But here’s where the trouble begins.
- Crude oil production dropped 1.8%, continuing a worrying trend.
- Natural gas slumped even more—down 3.6% in May.
- Fertilizers also plunged by 5.9%, the sharpest fall of all.
- And most concerning, electricity generation dropped by 5.8%, a major blow considering its importance to every sector.
The overall picture: four out of eight core sectors shrank in May.
The Bigger Picture: A Downward Drift?
This 0.7% growth in May comes after 1.0% growth in April and a stronger 4.5% in March. The cumulative growth for April–May 2025 now stands at just 0.8%.
That’s a clear slowdown.
Is it a short-term blip or the start of a trend? That depends on how quickly the energy sector picks up.
What’s Next?
India’s infrastructure sectors are mixed right now. If electricity and fossil fuel output don’t improve soon, even strong sectors like steel and cement may not be enough to drive momentum.
That’s something policymakers will want to watch closely.
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