R. Suryamurthy
India’s eight core infrastructure sectors witnessed a combined growth of 3.8% in March 2025 compared to the same period last year, according to provisional data released by the Ministry of Commerce and Industry today. The Index of Eight Core Industries (ICI), which comprises 40.27% of the weight of items included in the Index of Industrial Production (IIP), indicates a positive trend in key areas of the economy.
Leading the growth were the cement and steel industries, registering impressive increases of 11.6% and 7.1% respectively. Experts attribute this surge to increased government spending towards the end of the fiscal year and a notable rise in private sector investment announcements in the fourth quarter.
Other sectors contributing to the positive growth in March include fertilizers (8.8%), electricity (6.2%), and coal (1.6%), while refinery products saw a modest increase of 0.2%.
However, not all sectors experienced growth. Crude oil production declined by 1.9% and natural gas production saw a significant drop of 12.7% compared to March 2024. Analysts suggest that lower international crude oil prices and increased natural gas imports substituting domestic production contributed to this downturn in the oil and gas sector.
The cumulative growth rate of the ICI for the entire fiscal year 2024-25 stands at a provisional 4.4%, down from the 7.6% growth recorded in the previous fiscal year.
Commenting on the data, Madan Sabnavis, Chief Economist at Bank of Baroda, described the core sector growth in March as a “mixed bag.” He highlighted the strong performance of construction-related industries like cement and steel, while noting the subdued performance of the oil complex.
The robust growth in fertiliser production (8.8%) was attributed to a favourable base effect and companies increasing output in anticipation of the upcoming kharif sowing season. Electricity generation also saw a healthy rise (6.2%) due to increased demand driven by the early onset of summer and heatwaves across the country. In contrast, coal production growth remained modest at 1.6% for the second consecutive month, partly due to a high base effect and increased adoption of renewable energy sources.
Looking ahead, analysts anticipate the Index of Industrial Production (IIP) for March to register growth in the range of 4-4.5%, buoyed by the strong performance of the core industries.