India’s Infrastructure Output Rises 6.3% In August on Steel and Coal Surge

India’s infrastructure sector gained momentum in August 2025, as the eight core industries recorded 6.3% year-on-year growth, up from 3.7% in July. The growth reflects strong output in steel, coal, cement, fertilisers, electricity, and refinery products, which together offset continued weakness in crude oil and natural gas. The Index of Eight Core Industries (ICI), accounting for 40.27% of the Index of Industrial Production (IIP), remains a key barometer of industrial health.

Steel And Coal Drive Growth

Steel was once again the top performer in August, with production rising 14.2% compared with 16.6% in July. Strong demand from construction and infrastructure projects continues to support the sector. Coal output surged 11.4%, marking a sharp turnaround from last year’s contraction, and ensuring steady fuel supply for electricity generation and industrial use.

Mixed Performance In Other Sectors

Cement production grew 6.1% in August, moderating from July’s double-digit pace but still reflecting resilient demand in real estate and infrastructure. Fertiliser output rose 4.6%, aided by seasonal demand ahead of the crop cycle. Electricity generation recorded a 3.1% increase, while refinery products grew 3%, indicating steady energy consumption and refining capacity utilisation.

Persistent Weakness In Crude Oil And Gas

Despite the strong performance of most sectors, crude oil and natural gas continued to drag on overall growth. Crude oil production contracted 1.2%, reflecting persistent challenges in India’s upstream sector, while natural gas output declined 2.2%. Both segments have struggled through the April–August period, highlighting structural hurdles in exploration and production.

Cumulative Performance April–August

For the first five months of FY26, the combined growth of the eight core industries stood at 2.8%. The modest pace underscores a gradual but uneven recovery, with strength in steel, coal, and cement balancing the weakness in oil and gas. Sustained momentum in these industries is crucial for supporting the broader manufacturing sector and industrial output in the coming quarters.

Read More: Coal India wins bid for rare earth exploration block

Conclusion

The 6.3% rise in India’s infrastructure output during August 2025 highlights improving industrial momentum, supported by steel and coal production. However, the persistent contraction in crude oil and natural gas output remains a concern. With cumulative growth still moderate at 2.8% for April–August, the challenge ahead lies in sustaining broad-based gains while addressing energy sector weaknesses that could limit industrial recovery.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.