Modest growth in June
Mixed Signals from Industry as Core Sector Grows 1.7 Percent in June 2025: India’s core sector recorded a 1.7% year-on-year growth in June 2025, marking a slight improvement over May 2025’s revised growth of 1.2%. However, the figure is sharply lower than the 5% growth seen in June 2024, reflecting persistent strain across key sectors.
This uptick, though minor, represents a three-month high in core sector performance, driven mainly by stronger output in steel, cement, and refinery products.
What the core sector includes
The Index of Core Industries (ICI) monitors eight crucial infrastructure sectors: coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity.
These industries make up 40.27% of the Index of Industrial Production (IIP). The ICI is compiled and released by the Ministry of Commerce and Industry every month.
Static GK fact: The IIP was introduced in India in 1937 and is a key economic indicator used for measuring industrial activity.
Sector-wise performance
Out of the eight sectors, five reported negative output growth in June 2025:
- Coal: -6.8%
- Crude Oil: -1.2%
- Natural Gas: -2.8%
- Fertilizers: -1.2%
- Electricity: -2.8%
The decline in energy production continues to drag down the overall index.
However, there were key positive contributors:
- Steel: +9.3%
- Cement: +9.2%
- Refinery Products: +3.4%
These gains provided the necessary lift to prevent further decline in the aggregate index.
April–June quarter performance
In the April–June quarter of FY 2025–26, the core sector expanded by only 1.3%, down from 6.2% in the same quarter of the previous fiscal year.
This sharp drop indicates broader industrial weakness, especially in the early stages of the fiscal cycle. Sluggish performance could have downstream effects on GDP growth and investment cycles.
Why this matters
The core sector’s output serves as a leading indicator for overall industrial growth. Since these sectors supply critical inputs, their performance affects:
- GDP projections
- RBI monetary policy stances
- Investor and corporate sentiment
A decline in energy and fertilizer production poses risks to agriculture and power-intensive industries, while growth in steel and cement supports infrastructure and construction activity.
Key challenges ahead
The contraction in five sectors underlines persistent issues:
- Supply chain disruptions post-global trade tensions
- Volatile crude oil prices on the international market
- Weak electricity demand due to monsoon variability
- Rising input costs in the fertilizer sector
Static GK Tip: India is the 2nd largest producer of cement in the world, after China.
Policy intervention may be needed to address these constraints and ensure sustainable industrial recovery.
Static Usthadian Current Affairs Table
Mixed Signals from Industry as Core Sector Grows 1.7 Percent in June 2025:
| Topic | Detail |
| Core sector growth (June 2025) | 1.7% |
| Previous month growth | 1.2% (May 2025, revised) |
| June 2024 growth | 5% |
| Index of Core Industries | Covers 8 infrastructure sectors |
| Highest performing sectors | Steel (+9.3%), Cement (+9.2%) |
| Worst performing sector | Coal (-6.8%) |
| Core sector weight in IIP | 40.27% |
| Ministry responsible | Ministry of Commerce and Industry |
| April–June FY26 growth | 1.3% |
| FY25 April–June growth | 6.2% |
