Infrastructure growth at 15 month high, output rises 6.3% in August

The output of India’s core infrastructure sector grew by 6.3% in August 2025, the fastest pace in 15 months, supported by a favourable base effect and robust growth in coal, steel, and cement, according to data released by the commerce and industry ministry on Monday.The performance, measured by the Index of Eight Core Industries (ICI), marked the strongest growth since May 2024. In comparison, the sector had grown by just 3.7% in July 2025.
The steel sector led the rally, registering 14.2% year-on-year growth in August, followed by an 11.4% jump in coal production and a 6.1% increase in cement output. Electricity generation rose 3.1%, while fertiliser production grew 4.6% during the month.However, crude oil and natural gas continued to drag on the overall performance. Natural gas output contracted by 2.2% in August compared to a year earlier, while crude oil production remained subdued. Cumulatively, natural gas output for April–August 2025-26 is down 2.5% year-on-year.The eight core industries together account for 40.27% of the Index of Industrial Production (IIP), making the performance of this sector a crucial indicator of industrial activity. Analysts expect the August uptick to reflect in overall factory output.
“The pickup in core infrastructure sector growth is likely to keep IIP growth at around 5.5% YoY in August 2025. We expect the core sector to expand by about 5% YoY in September 2025,” said Paras Jasrai, Associate Director, India Ratings and Research.On a cumulative basis, core sector output grew by 2.8% during April–August 2025-26, compared to the same period last year.ICRA Chief Economist Aditi Nayar noted that the August improvement was particularly driven by coal, which grew 11.4% after recording a double-digit contraction in July. “Overall, five of the eight sectors, barring steel, cement, and electricity, saw an improvement in their YoY growth performance in August vis-à-vis July 2025,” she said.While cement output grew 6.1%, it was at a 10-month low, with monsoon-related disruptions in several regions weighing on demand and production.Economists believe the August rebound signals resilience in India’s infrastructure activity, but the underperformance in hydrocarbons remains a concern for sustaining momentum in the coming months.

(Business Correspondent)