Core Industries Growth Slows To Eight-Month Low Of 0.5% In April Amid Tariff Turbulence
Based on the tepid rise in the core sector output, ICRA expects the IIP growth to moderate sharply to about 1% in April 2025.
The index of eight core industries grew 0.5% in April, compared to 4.6% in March, according to data released by the Ministry of Commerce & Industry on Tuesday.
The slump came amid the unprecedented tariffs announced by US President Donald Trump on April 2 on all trading partners. The tariffs, which triggered a wave of uncertainty in exporting countries, were paused for 90 days a week later.
Five of India's eight core sectors witnessed expansions in April. The production of crude oil, refinery products and fertilisers recorded a contraction.
Based on the tepid rise in the core sector and the performance of the other available high frequency indicators, ICRA expects the IIP growth to moderate sharply to about 1% in April 2025. The healthy growth in non-oil exports may provide an upside, unless the same represented round-tripping of some imports, said Aditi Nayar, chief economist at ICRA
Industry-Wise Trend:
Cement was the sector with the highest growth at 6.7% on an annual basis, versus 9.2% in March.
Coal production grew 3.5%, from 1.6% in March.
Natural gas production was a laggard with a decline of 0.4%, compared to a rise of 12.7% in April.
Petroleum refinery products, that have the highest weightage among the eight industries, were the biggest laggard, contracting by 4.5% compared to a marginal increase of 0.2% in the previous month,
Fertiliser production also saw a fall of 4.2% in April, growing by 8.8% in previous month.
Steel production grew by 3% after growing by 9.3% in March.
Electricity generation was up by just 1% on an annual basis, compared to a growth of 7.5% in the previous month.
