India’s core sector growth hits 8-month low at 0.5% in April

India’s core sector growth slowed to 0.5% in April 2025 from 4.6% in March, due to tariff-related uncertainty and a high base. Economists expect IIP to dip to 1%. Global tensions have also led the IMF and World Bank to lower India’s GDP forecasts.

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India’s core sector growth fell sharply to an eight-month low of 0.5% in April 2025, down from 4.6% in March, according to provisional data released by the government on May 20. This slowdown was attributed to global uncertainty driven by tariff-related tensions and a high base effect. 

According to Paras Jasrai, Associate Director, India Ratings and Research, “The impact of Tariff Tantrums led unprecedented economic uncertainty along with a high base effect (April 2024: 6.9% yoy) pulled the infrastructure output growth down to be the lowest since August 2024. Majority of the sub-sectors (six) witnessed a moderation in growth in April 2025 compared to the previous month’s four.” 

The eight core industries — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity — which together account for 40% of the Index of Industrial Production (IIP), began the fiscal year with their steepest sequential decline since April 2021, contracting by 11.4%.

Three of the eight sectors saw contraction, while only two posted stronger growth than the previous month. Cement emerged as the top performer with 6.7% growth, although that was a slowdown from 12.2% in March. Coal production improved, rising 3.5% compared to 1.6% the month before. However, electricity growth dropped significantly to 1% from 7.5%. 

The overall deceleration was broad-based, affecting six out of eight sectors, noted Aditi Nayar, Chief Economist at ICRA.

Given the weak performance in the core sectors and other high-frequency indicators, ICRA expects IIP growth for April to dip to around 1%, compared to 3% in March. While non-oil exports may provide some upward momentum, Nayar cautioned this could be distorted by round-tripping of imports. The government is set to release official IIP figures on May 28, with the timeline for data release recently shortened to 30 days from 45. 

Meanwhile, broader concerns persist over India’s economic momentum. The IMF and World Bank have revised India’s growth forecasts downward — to 6.2% and 6.3%, respectively — citing the impact of global geopolitical tensions. The government will also announce Q4 FY25 GDP data on May 30, which will offer further clarity on the country’s growth trajectory.