March 2025 Core Sector Output Grows 3.8% Backed by Power Demand

India's key infrastructure sectors posted a 3.8% year-on-year growth in March 2025, slightly up from February’s pace, largely fueled by a surge in electricity demand driven by early summer and heatwaves. Though still lower than the same period last year, this improvement reflects strong output.

Shivam Last updated on April 23rd, 2025 01:51 pm

India’s core sector output recorded a 3.8% year-on-year growth in March 2025, driven by increased electricity generation due to rising temperatures and early summer heatwaves. This performance marks a slight improvement over February’s 3.4% but is lower than the 6.3% growth recorded in March 2024. The eight core infrastructure industries — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity — account for 40.27% of the Index of Industrial Production (IIP). Growth was led by electricity, steel, and cement, while natural gas and crude oil continued to underperform due to weak global prices and higher imports replacing domestic production.

Key Highlights of Core Sector Growth – March 2025

Overall Performance

Core sector growth: 3.8% in March 2025
Growth in February 2025: 3.4%
Growth in March 2024: 6.3%
Data is provisional and sourced from the Ministry of Commerce and Industry

Electricity Sector

Growth: 6.2% in March 2025 (up from 3.6% in February)
Reason: Early summer onset and widespread heatwaves increased power demand
Comparison: March 2024 had an even stronger growth of 8.2%

Steel and Cement

Steel output growth: 7.1% (up from 6.9% in February)
Cement output growth: 11.6% (up from 10.8% in February)

Drivers

Increased government infrastructure spending
Surge in private sector investment in Q4 FY2024-25

Oil and Gas Sector

Natural Gas

Output fell by 12.7%, marking the ninth consecutive month of decline
Reason: Substitution with higher imports and low crude prices

Crude Oil

Declined 1.9%, reversing growth seen in the past three months

Refinery Products

Marginal growth of 0.2%
Factors: Weak export demand and lower international prices

Other Sectors

Coal and Fertilizers: Reported moderation in growth compared to February
Fertilizer and refinery products saw a decline in year-on-year growth
Mixed performance across sectors indicates a patchy recovery pattern

Summary/Static	Details
Why in the news?	March 2025 Core Sector Output Grows 3.8% Backed by Power Demand
Electricity	+6.2% growth, driven by heatwaves and early summer onset
Steel	+7.1% growth, boosted by government and private sector investment
Cement	+11.6% growth, supported by infrastructure demand and government spending
Natural Gas	-12.7% decline, ongoing contraction with higher imports substituting domestic output
Crude Oil	-1.9% decline, following a brief period of growth
Refinery Products	+0.2% growth, limited by weak exports and lower international prices
Coal & Fertilizers	Moderate growth, showing slower performance compared to February
Overall Core Sector	+3.8% growth, up from February’s 3.4%, but lower than March 2024’s 6.3%
IIP Contribution	Accounts for 40.27% of total Index of Industrial Production (IIP)
IIP Growth Forecast	3.0–4.5% growth (ICRA & BoB estimates) based on core sector performance