India's core infrastructure sector growth slipped to a seven-month low of 0.5% in May, official data showed on Tuesday. The Index of Eight Core Industries (ICI) had expanded by 1.8% in April and 1.2% in May 2025.
Eight core industries performance
The eight core industries—coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity—together account for about 40% of the Index of Industrial Production (IIP). In May, coal production grew 4.2%, crude oil output fell 2.1%, natural gas rose 3.5%, refinery products increased 1.8%, fertilisers rose 2.5%, steel grew 1.2%, cement declined 0.8%, and electricity generation rose 1.5%.
Impact on industrial output
The sluggish core sector performance is likely to weigh on the broader industrial production numbers for May. Economists had expected a modest recovery after April's slowdown, but the data indicates persistent weakness in demand and investment. According to a government official, the low growth reflects global economic uncertainties and subdued domestic demand. The official added that the government is monitoring the situation and may take steps to boost infrastructure spending.
Comparison with previous months
The ICI growth has been on a declining trend since February 2026, when it stood at 4.1%. It fell to 3.5% in March and then to 1.8% in April. The 0.5% in May is the lowest since October 2025, when the index contracted by 0.3%.
Outlook
Analysts expect the core sector to remain under pressure in the near term due to high base effects and sluggish demand. However, the upcoming monsoon season and government's capital expenditure push may provide some support in the coming months.
