India’s core sector growth slows to 2.9% in February

The output of eight core infrastructure sectors, which account for two-fifths of India’s industrial output, expanded by 2.9% in February—the slowest monthly pace in five months.

A year ago, in February 2024, core sector output had expanded at 7.1%.

Only three of the eight core industries reported a monthly rise in production, and only two sectors, cement and fertilizers, saw higher output in February compared to the year-ago period, showed the latest core sector data released by the Union commerce ministry on Friday.

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To be sure, core sector output contributes 40.27% to the Index of Industrial Production (IIP).

In January, industrial output growth picked up, after slowing down in the previous month, due to a rise in manufacturing and mining activities.

The IIP grew at 5% in January, up from 3.2% in the previous month, according to the estimates released by the Ministry of Statistics and Programme Implementation.

"The core sector growth moderated to a five-month low of 2.9% in February 2025 from 5.1% in January 2025, although this was partly on account of the leap year-related high base," said Aditi Nayar, chief economist, head-research and outreach, Icra Ltd.

"As many as five of the eight indicators, including coal, crude oil, natural gas, refinery and cement output, recorded a weaker annual performance in February 2025 vis-à-vis the previous month. Given these trends, we expect the IIP growth to ease to about 3-3.5% in February 2025 from 5.0% in January 2025," she added.

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Cement, fertilizer output

Fertilizers and cement boosted core sector output in February, with production growth of 10.2% and 10.5%, respectively, although cement production growth declined month-on-month.

Fertilizers and cement output grew by 3% and 14.6%, respectively, in January.

In February, the output of crude oil contracted by 5.2% and natural gas by 6%.

Coal output grew by 1.7% in February, its slowest pace in six months, while refinery output rose by 0.8%, also the slowest in six months.

Steel production grew by 5.6% in February, up from 4.7% in the previous month, while electricity output rose by 2.8%, compared to a 2.4% rise in January.

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Manufacturing slowdown

India’s manufacturing growth fell in February after rising to a six-month high in January, as sales and output growth retreated to a 14-month low, according to the HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global.

Manufacturing PMI fell to 56.3 in February from 57.7 in January. A PMI reading above 50 indicates an expansion.