Now Reading: India core sector growth slows to 5.4% in July, demand eases
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India core sector growth slows to 5.4% in July, demand eases
Growth in India's core industrial sectors slowed to 5.4% in July from 6% in June, aligning with other indicators of easing demand. The Manufacturing Purchasing Managers' Index also fell in July to…
Growth in India's core industrial sectors slowed to 5.4% in July from 6% in June, aligning with other indicators of easing demand. The Manufacturing Purchasing Managers' Index also fell in July to its lowest level since August 2021, reflecting weak domestic demand.
The Hindu notes that much of the growth stems from a statistical low base effect. The coal sector grew 7.6% after a 12.3% contraction a year ago. The steel sector slowed sharply to 2.9% from 5.6% in June. Crude oil and natural gas have contracted for 14 straight months, and the crude oil import bill jumped 41% in July. The cement and electricity sectors were the only bright spots, growing at 13.1% and 9% respectively.
India faces slack demand, higher costs and moderating growth, with US tariffs on Russian oil imports also expected to burden exporters.
Indian Opinion Analysis
The core sector data signals the broad-based nature of the slowdown, as it covers eight industries accounting for over 40% of the Index of Industrial Production. The persistent contraction in domestic oil and gas output is structural, not cyclical, and raises the stakes for the government's ethanol blending target and exploration policy. The 100% US tariff threat on Russian oil imports, if enforced, could add billions of dollars to India's import bill and squeeze refining margins. The Reserve Bank of India's monetary policy committee, which next meets in October, will weigh these figures alongside inflation data before any rate decision.
Source: news.google.com
This brief was synthesised by AI from the source linked above.
