NEW DELHI: Amid the ongoing conflict in West Asia, output in India's eight core infrastructure industries inched up to 1.7% in April from the upwardly revised 1.2% in March, according to latest official data released on Wednesday. Notably, as many as four industries linked to the energy sector and the fertiliser industry registered a decline in output during the month, highlighting the impact of the blockade of the Strait of Hormuz in the wake of the conflict in the Persian Gulf region.
Energy and Fertiliser Sectors Hit Hard
Data showed that output in coal (-8.7%) and fertilisers (-8.6%) contracted for the second consecutive month, while crude oil (-3.9%) output declined for the eighth consecutive month. Additionally, output in natural gas (-4.3%) and refinery products (-0.5%) shrank in April after a positive showing in March. These declines reflect the disruptions caused by the geopolitical tensions in West Asia, which have affected supply chains and increased input costs.
Steel and Cement Sectors Show Strength
However, output in steel (6.2%) and cement (9.4%) sectors accelerated during the month, reflecting continued government capital expenditure. Electricity generation (4.1%) also picked up pace on account of a low base and high demand due to the ongoing heat wave across the country.
The eight core sectors constitute 40.3% of the Index of Industrial Production (IIP), which measures output in the country's industrial sector. The conflict in West Asia is expected to have weighed heavily on the industrial sector, which had earlier slipped to a five-month low of 4.1% in March. Analysts will be watching the next IIP data closely to assess the full impact of the geopolitical situation on India's industrial growth.
