India’s Key Infrastructure Sectors Growth Hits 13-Month High of 6.3%

India's eight core infrastructure sectors recorded a robust 6.3% year-on-year growth in August 2025, marking a 13-month peak driven by strong performances in coal, steel, and cement production, government data showed on Monday. The Index of Eight Core Industries (ICI), which tracks output in coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity, reflects a vital pulse of the economy's foundational segments.

These sectors contribute about 41% to the Index of Industrial Production (IIP), making the uptick a positive signal for overall industrial momentum amid global headwinds.

The expansion follows a more modest 3.7% growth in July 2025 and a contraction of 1.5% in August 2024, with the last comparable 6.3% rise occurring in July 2024. Cumulative growth for April-August 2025 stood at 2.8%, a slowdown from the 4.6% recorded in the same period of the previous fiscal year.

Key drivers included coal output jumping 11.4%, steel production climbing 14.2%, and cement expanding 6.1%, fuelled by sustained demand from construction and manufacturing rebounds. Refinery products, fertilisers, and electricity also advanced, with gains of 3%, 4.6%, and 3.1%, respectively, supporting energy and agricultural needs.

On the downside, crude oil and natural gas outputs contracted, highlighting persistent challenges in upstream energy extraction amid volatile global prices and supply constraints. These sectors have weighed on overall figures in recent months, though analysts anticipate a recovery.

The data release comes as India navigates post-pandemic economic stabilisation, with infrastructure investments under the National Infrastructure Pipeline—valued at over Rs 111 lakh crore—playing a pivotal role in job creation and GDP growth.

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Aditi Nayar, chief economist at rating agency ICRA, attributed the surge to a favourable low base effect, noting it "expectedly improved to a 13-month high." She forecasts IIP growth for August at 4.5-5.5%, bolstered by a potential turnaround in mining, which contracted monthly from April to July 2025. This optimism aligns with government pushes for self-reliance in key materials, though sustained gains will hinge on moderating inflation and export resilience.

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