India’s core infrastructure output expanded 3.8% in March on the back of improved performance by electricity, steel and cement sectors which neutralised the impact of contraction in the petroleum sector.
With summer setting in, electricity output increased 6.2% on year in March, up from 3.6% in February. The cement sector that has been the direct beneficiary of pick up in government spending on infrastructure saw its output go up by 11.6% in March from 10.8% in February.
The cement sector growth has been in double digits since November last year.
Steel sector output was up 7.1 % from 6.9%. “Private sector investment announcements increased sharply in Q4 which also supports this growth in demand for steel,” Chief Economist at Bank of Baroda Madan Sabnavis said.
Cor sector roughly accounts for two-fifth of industrial production. Since November 2024, core sector growth has been on a declining path.
According to Aditi Nayar, chief economist at Icra, in disaggregated terms, the sequential trend was quite mixed, with fertilisers, coal, natural gas and refinery products reporting a moderation in their YoY growth in March 2025 relative to the previous month. “Based on the expansion in the core sector, ICRA expects the IIP growth to print at 3.0-3.5% in March 2025,” she wrote.
The refinery sector – which is the highest weight of 28.04% in the Index of Eight Core Industries (ICI) was up just 0.2% as against 0.8% in February. Natural gas output was down 12.7% in March while crude oil output contracted 1.9%. Fertilizer sector expanded 8.8% and coal 1.6%.
For the full 2024-25 the combined index of eight core industries (ICI) was up 4.4% as against 7.6% in 2023-24. The core sector index has 40.27% weight in the broader Index of Industrial Production (IIP).
Based on the performance of the core sector, for March IIP growth may be expected to range between 4-4.5%, Sabnavis said.
The release of ICI, which is compiled by the Department for Promotion of Industry and Internal Trade (DPIIT) has been advanced by almost two weeks. Earlier it used to be released on the last working day of every month. This change has been done to accommodate the advance in release date of IIP.
From now on the IIP will be released on 28th of every month and will disseminate data of industrial performance of previous month. If 28th is a public holiday then it will be released the next day.
This reduces the release timeline for the IIP data from 42 days to 28 days. The advancement of the release date has been made possible by advancement in data collection and processing technologies, Ministry of Statistics and Programme Implementation (MOSPI) said. This decision was also vetted by a committee of stakeholders.