India's Infrastructure Output Grows 1.7% in May

India's Industrial Activity Partially Recovers in May

India's infrastructure output has shown a modest improvement in May, with the eight core industries experiencing a growth rate of 1.7 percent, up from a revised 1.2 percent in the previous month. This indicates a partial recovery in industrial activity, despite several sectors continuing to face pressure.

The improvement was led by better performance in coal, steel, and cement. Coal production growth accelerated to 3.5 percent in April 2026 from a contraction of 4 percent in March. Steel output remained robust, expanding 6.2 percent, albeit slower than 7.7 percent in the previous month. Cement production also strengthened sharply, with growth rising to 9.4 percent from 4.7 percent, pointing to continued resilience in construction and infrastructure activity.

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However, the recovery remained uneven. Crude oil production contracted 3.9 percent, while natural gas output declined 4.3 percent, underscoring persistent weakness in domestic hydrocarbon production. Petroleum refinery products also remained in negative territory, shrinking 0.5 percent.

Fertilisers continued to be the weakest component, contracting 8.6 percent in April after a steep 24.6 percent decline in March, as the West Asia crisis weighed on the industry. The Middle Eastern region is a significant contributor to the fertiliser industry.

The sharp rebound in cement and electricity indicates that government-led infrastructure spending and seasonal demand are continuing to support activity, even as energy production constraints and fertiliser weakness limit the pace of expansion.

The latest data suggests that while India's industrial backbone remains in growth territory, the momentum is still considerably below the levels seen in late 2025 and early 2026, when core sector growth regularly exceeded 4 percent.

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With the core industries showing only modest improvement, the broader Index of Industrial Production is also likely to reflect a subdued but positive expansion for May.