Core sector output flat in October, marking sharpest slowdown in 14 months

New Delhi: India’s core infrastructure sector posted zero growth in October, with output flat year-on-year, provisional data from the commerce ministry revealed on Thursday. This was its weakest showing in 14 months.

The slowdown follows a steady deceleration, with growth having eased to 3.3% in September and 6.5% in August (revised from 6.3%). In comparison, the sector had expanded 2.4% in September 2024.

The eight core sectors – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity – together make up over two-fifths of the country’s industrial output.

In October, growth contracted in four of these sectors: coal, crude oil, natural gas, and electricity, while steel saw its output slow compared to the previous month. Other sectors such as cement, fertilisers, and refinery products saw a rise in output from the previous month.

New Delhi: India’s core infrastructure sector posted zero growth in October, with output flat year-on-year, provisional data from the commerce ministry revealed on Tuesday. This was its weakest showing in 14 months.

The slowdown follows a steady deceleration, with growth having eased to 3.3% in September and 6.5% in August (revised from 6.3%). In comparison, the sector had expanded 2.4% in September 2024.

The eight core sectors – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity – together make up over two-fifths of the country’s industrial output.

In October, growth contracted in four of these sectors: coal, crude oil, natural gas, and electricity, while steel saw its output slow compared to the previous month. Other sectors such as cement, fertilisers, and refinery products saw a rise in output from the previous month.

• Coal output contracted 8.5% in October, deepening from a 1.2% decline in September.
• Crude oil production shrank 1.2%, broadly unchanged from the 1.3% fall a month earlier.
• Natural gas output fell 5%, compared with a 3.8% contraction in September.
• Refinery production rebounded, rising 4.6% year-on-year after a 3.7% decline in September.
• Fertiliser output strengthened to 7.4% growth, up sharply from 1.6% in the previous month.
• Steel output expanded 6.7%, slowing from the robust 14.4% growth recorded in September.
• Cement production grew 5.3%, slightly above the 5% rise a month earlier.
• Electricity generation slumped 7.6% in October, reversing the 3.1% growth seen in September.

Excess rainfall impacted mining activity and power demand in October, while growth in the steel sector decelerated owing to an adverse base and the early onset of the festive season, said Aditi Nayar, chief economist, ICRA Ltd.

“Given the deterioration in the performance of the mining and electricity segments, ICRA expects the IIP (index of industrial production) growth to ease somewhat to about 2.5-3.5% in October 2025 from 4% in September 2025, even as the growth in manufacturing is likely to remain healthy aided by higher demand during the festive season on account of the GST rate rationalisation and the ensuing restocking,” she added.

Broader industrial activity in the country has shown signs of strain recently, but the festive season has brought some cheer. India’s industrial production grew 4% annually in September, its slowest pace in three months, chiefly because mining output contracted, according to provisional data released by the statistics ministry late last month. The October data will be released at the end of the month.

Manufacturing regains momentum

Private surveys suggest that the manufacturing sector regained some momentum in October after cooling to a four-month low in September, lifted by GST relief measures, improved productivity, and increased technology investments.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, climbed to 59.2 in October from 57.7 in September, compared with 59.3 in August and 59.1 in July. The index stood at 58.4 in June, 57.6 in May, and 58.2 in April. A reading above 50 indicates expansion in activity. However, external sales rose at the slowest pace in 10 months, signalling some moderation in external demand, the survey cautioned.

The strain on industrial activity comes amid external pressures. The US, which accounts for roughly 17% of India’s exports, imposed steep tariffs of up to 50% on many goods, including textiles, jewellery and machinery, which came into effect from 27 August.

As a result, exports to the US stood at $6.3 billion in October, up from $5.8 billion the previous month, but down from $6.9 billion the previous year.