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India’s Infrastructure Output Cools—Will Q1 GDP Feel the Heat?


Updated: July 21, 2025 18:02

Image Source : StudyiQ
India’s infrastructure output grew just 1.3% year-on-year in the April–June quarter of FY26, marking a sharp deceleration from 6.2% growth in the same period last year. The slowdown reflects persistent weakness across key industrial inputs and subdued capital formation.
 
Key Highlights:
 
- June infrastructure output rose 1.7% y/y, up from 1.2% in May
 
- This marks the third consecutive month of sub-2% growth across eight core sectors
 
- Crude oil and natural gas output declined 1.2% and 2.8% respectively in June
 
- Cement and steel production rose 9.2% and 9.3%, supporting construction momentum
 
- Electricity generation fell 2.8%, while coal output dropped 6.8%
 
Economic Implications:
 
- Core sectors contribute 40% to India’s Index of Industrial Production
 
- Weak infrastructure growth may weigh on Q1 GDP and delay recovery in manufacturing
 
- Economists cite uneven capital formation and global demand challenges as key drags
 
Sources: Moneycontrol, Reuters, Trading Economics, Financial Express, Yahoo Finance India

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