India’s economic momentum appears to have registered its sharpest pause in more than a year, with official data showing zero growth in the country’s eight core sectors in October 2025. This marks the weakest performance in 14 months, signalling a broader deceleration in industrial activity and raising concerns about the trajectory of the overall Index of Industrial Production (IIP) for the coming months.

The eight core infrastructure industries—coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity—collectively account for 40.27% of the IIP. Their monthly performance is therefore closely monitored as a leading indicator of industrial and economic health.

In October 2025, the combined output of these sectors posted 0% growth, driven by a sharp split across industries: while four sectors expanded, the other four recorded contractions significant enough to nullify the gains.

According to preliminary estimates shared by officials, growth in steel, cement, fertilisers, and refinery products helped maintain some momentum, but declines in coal, crude oil, natural gas, and electricity sectors erased any overall improvement.

This stagnation signals stress in both supply-side industrial operations and demand-side consumption patterns and comes at a time when policymakers are looking to sustain economic expansion amid domestic policy transitions and global volatility.

A Closer Look at the Sector-Wise Breakdown

1. Coal Sector: Negative Growth Adds Pressure

The coal sector, which has been pivotal in maintaining electricity generation stability in recent years, saw a contraction in October 2025. While detailed figures are awaited, sector experts attribute this decline to a combination of factors:

• localised disruptions in mining operations,

• reduced offtake by thermal power plants,

• delays in rail logistics affecting supply movement, and

• seasonal factors affecting peak production cycles.

Given India’s heavy dependence on coal for electricity generation—even as renewable penetration increases—a contraction in coal output often cascades into stress in related industries, especially power distribution companies and thermal power systems.

2. Crude Oil: Output Declines Again

The crude oil sector has been struggling with output challenges for several years due to ageing fields, limited fresh discoveries, and high dependence on imports. October 2025 continued this declining trend, with domestic crude extraction falling further.
The dip highlights persistent structural issues such as:

• stagnating exploration and production (E&P) capacity,

• investment hesitancy in domestic upstream assets,

• technological gaps in extraction from mature wells.

Oil refiners may face higher input costs or increased reliance on imported crude, influencing the broader downstream petroleum ecosystem.

3. Natural Gas Output Contracts

India’s natural gas production declined in October, continuing a multi-month pattern influenced by reduced output from key offshore blocks, maintenance shutdowns, and erratic weather conditions affecting offshore operations.
Reduced natural gas supply impacts multiple sectors including:

• fertiliser manufacturing,

• power generation,

• petrochemicals,

• city gas distribution networks.

The contraction thus has wider implications for industrial output, cost structures, and long-term supply planning.

4. Electricity Sector Records Significant Contraction

Perhaps the most surprising element in October’s data was the decline in the electricity sector, which has typically been a stable performer. The dip in electricity generation was reportedly driven by:

• lower thermal generation due to coal supply mismatch,

• weaker demand from distribution companies (DISCOMs),

• higher dependence on intermittent renewable sources during the month,

• seasonal decline in industrial usage post-monsoon.

Electricity output is often reflected in broader industrial energy consumption patterns; therefore, a contraction may indicate early signs of slowing activity across manufacturing hubs.

Sectors That Supported Growth but Not Enough

5. Steel Sector Continues to Expand

The steel sector remained a bright spot, driven by construction, automotive demand, infrastructure rollout under government programs, and export orders. Although steel production rose, its contributions were insufficient in overcoming the downturn in other sectors.

6. Cement Sector Posts Positive Growth

Cement output grew in October, supported by ongoing construction activity, pre-festival real estate demand, and infrastructure spending. This sector’s performance typically mirrors investment-led activity in the economy.

7. Fertilisers: Seasonal Boost Ahead of Rabi Preparations

The fertiliser industry saw higher output due to pre-Rabi season stocking, government procurement, and increased off-take by agricultural input dealers. This seasonal spike contributed positively to October’s data.

8. Refinery Products Maintain Steady Growth

Refinery output expanded slightly on the back of strong utilisation rates in public and private refineries, steady demand for transportation fuels, and export-driven refinery cycles.

Why Zero Growth Signals a Warning

A stagnation in the composite index of eight core sectors indicates potential headwinds across multiple verticals of the Indian economy:

Demand-Supply Weakness

The split between expansion and contraction signals an uneven recovery, where demand-driven sectors like steel and cement are doing well but energy-heavy sectors such as electricity and coal reflect weaknesses.

Impact on Upcoming IIP Data

Since core industries make up more than 40% of the IIP, zero growth in October could lead to:

• subdued industrial production in the corresponding month,

• slower momentum in manufacturing activity,

• ripple effects across supply chains.

Policy Considerations

This data comes ahead of key monetary policy reviews and fiscal planning sessions. Policymakers may have to consider sector-specific interventions, especially in hydrocarbons and electricity, to restore balance.

Comparisons with Previous Months

The October 2025 stagnation follows:

• moderate growth in September,

• high growth in mid-2025 due to festive-demand cycles,

• a sustained increase in steel and infrastructure-driven output.

This makes October’s flat growth particularly noteworthy as it breaks a rising cycle observed earlier in the year.

Global Headwinds and Domestic Factors

Experts attribute the slowdown to a combination of domestic and global factors:

Domestic Challenges

• operational bottlenecks in coal and power sectors,

• high input costs impacting upstream production,

• infrastructure-related logistical disruptions.

Global Factors

• uncertain global energy markets,

• volatility in commodity prices,

• supply chain disruptions affecting oil and gas sectors.

Economic Implications Going Forward

For Industry

Manufacturers dependent on electricity, coal, and natural gas may face operational inefficiencies or cost escalations.

For Investors

Stagnation in core sectors may influence market perception toward industrial and infrastructure firms in the near term.

For Policymakers

The focus may shift to boosting hydrocarbon production, supporting power sector reforms, and improving logistics to stabilise supply chains.

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