India’s core sector growth slowed sharply to just 0.7% in May 2025, the lowest level seen in nine months, according to data released by the Ministry of Commerce & Industry on June 20. This marks a significant drop from the 1% growth recorded in April and the 4.5% seen in March.
What Is the Core Sector?
India’s core sector includes eight key industries:
Coal
Crude Oil
Natural Gas
Refinery Products
Fertilisers
Steel
Cement
Electricity
These industries account for 40.27% of the overall Index of Industrial Production (IIP) and are considered leading indicators of the country’s industrial health.
Why Did Growth Slow?
The slowdown in May was largely driven by a sharp decline in electricity generation, which dropped by 5.8% compared to the same period last year. Other major contributors to the weak performance were:
Fertiliser output: -5.9%
Natural gas production: -3.6%
Crude oil output: -1.8%
This broad-based weakness significantly pulled down overall growth.
Sectors That Showed Improvement
Despite the slowdown, some industries performed well:
Cement: +9.2%
Steel: +6.7%
Coal: +2.8%
Refinery products: +1.1%
These sectors helped cushion the overall decline, though not enough to offset the larger drop in electricity and fertiliser output.
April–May Performance Much Weaker Than Last Year
The cumulative core sector growth for April and May 2025 stood at just 0.8%, compared to a strong 6.9% growth during the same period in 2024.
Government officials cited a high base effect and production challenges in several sectors as key reasons for the slowdown, especially the sharp fall in electricity output, which had recorded double-digit growth last year.
Bank and Deposit Growth Also Slowing
Alongside the core sector numbers, the Reserve Bank of India reported a slowdown in credit and deposit growth:
Bank Loan Growth:
Actual: 9.0%
Previous: 9.8%
Deposit Growth:
Actual: 9.9%
Previous: 10.0%
This suggests that both demand for credit and liquidity conditions are cooling, in line with weaker industrial growth.
What’s Next?
The next update for June 2025 core sector data will be released on July 21, 2025. Markets and policymakers will closely watch whether this slowdown continues or if there is a rebound in key sectors.
Key Takeaway
India’s core industries are showing signs of stress, particularly in power and fertilisers. If this trend continues, it may impact overall industrial growth and the broader economy. The government may need to take targeted steps to revive output in lagging sectors.
India’s Core Sector Growth Falls to 0.7% in May 2025 — Lowest in 9 Months
I’m Abhishek Sharma, an Advocate based in Delhi, entrepreneur, investor, and founder of BigBreakingWire. I am an enrolled Advocate with a strong interest in entrepreneurship, media, and technology. I founded BigBreakingWire, a digital news platform covering breaking news, business, financial markets, companies, and important developments in India and around the world. I also have a software company and take an active interest in technology, software, AI, digital products, and new business ideas. As an investor, I’m interested in discovering and investing in promising businesses and startups. I look for good ideas, strong founders, practical business models, and opportunities with long-term potential. I enjoy building businesses, learning about new industries, and connecting with people who are working on interesting ideas and opportunities. Advocate | Entrepreneur | Investor | Founder & Editor-in-Chief, BigBreakingWire
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