Why in the news
Growth of India’s eight core industries slowed to a five-month low in February 2025, blamed on an unfavourable base and weak oil and gas output.
Key facts
| Sector | Growth, Feb 2025 | Comment |
|---|
| Cement | 10.5% | Helped by government capital expenditure |
| Fertiliser | 10.2% | Nearly two-year high; restocking and base effects |
| Steel | 5.6% | Strong infrastructure demand |
| Refinery products | 0.8% | Dip may mean stable fuel prices |
| Crude oil | -5.2% | Lower demand |
| Natural gas | -6.0% | Lower demand |
- Headline: 2.9% versus 5.1% in January and 7.1% a year ago.
- April-February FY25 average: 4.4%, against 7.8% in the same period last year.
Analysis
- Steel and cement demand should stay stable in the short term.
- Fertiliser spurt looks temporary and may fade once inventories settle.
- Oil and gas face weak demand, limited domestic output growth and energy transition effects.
Macro implications
- Core weight in IIP is 40.27%, so IIP may also slow.
- Signals softer momentum in infrastructure-linked industries.
Forecasts
| Agency | March core growth | February IIP |
|---|
| India Ratings | about 4.0% | about 3.0% |
| Bank of Baroda | about 4.5% | 3.0-3.5% |
Exam angle
- Core sector weight in IIP: 40.27%.
- Fertiliser at nearly two-year high: 10.2%.
- Decliners: crude oil and natural gas.