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Core sector output rose to 32-months high in March 2021

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The eight core sector output rose to 32-months high of 6.8 per cent in March 2021 chiefly on account of a negative base of -8.5 per cent in the corresponding month of the previous year. Therefore, one needs to read the core sector growth number with caution. The pick-up observed in March 2021 has been on account of significant double-digit growths witnessed in steel, cement, electricity and natural gas, where the production activity had seen a sharp decline in March 2020 on the back of the imposition of the nation-wide lockdown. The contraction witnessed in the month of February 2021 has been revised upwards to -3.8 per cent as against the previous estimate of 4.6 per cent.

For the full fiscal FY21, the core sector has contracted by 7 per cent compared with a subdued pace of 0.4 per cent in FY20. This is the first time in the last eight years when core sector output has declined. In 8 of out the 12 months during the fiscal, core sector output has seen a contraction, reflective of the adverse impact of the pandemic and the consequent lockdowns on the production activities of the 8-core sector. During the year, there has been a broad-based decline across almost all the sectors with the impact being sharp in refinery products, steel and cement sector. Fertiliser has been the only sector which has seen positive growth, which reflects unabated performance of the agriculture sector despite the lockdown while the impact on electricity production has been relatively lower as resumption of economic activities in the second half of the fiscal pushing up the growth number.

Key highlights:

  • Coal production recorded its sharpest contraction in the new series with the base year 2011-12. The de-growth of 21.7 per cent in March 2021 has come against a positive base of 3.7 per cent in March 2020 and it also reflects high level of coal inventories with coal producers. However, there has been a sequential improvement owing to healthy demand from the power steel and cement sector.

  • Crude oil production fell by 3.1 per cent in March 2021 compared with a decline of 5.5 per cent in March 2020 and this is the 40th consecutive month of negative growth for the sector. This decline can be ascribed to delays in installation of new platforms due to COVID-19 restrictions, localised lockdowns and lower planned contribution from work-over, drilling and old wells. Natural gas production rose sharply by 12.3 per cent in March 2021, its highest growth in the new series with the base year 2011-12. This is the first time the segment has recorded positive growth after 21 consecutive months of deceleration. The positive growth has been on account of a low base (-15 per cent in March 2020) coupled with production commencement of natural gas from one of the key players in the private sector.

  • Refinery production declined by 0.7 per cent in March 2021 compared with 0.5 per cent in March 2020, recording the 13th consecutive month of decline in production. Although there has been a sequential improvement, the fall can be ascribed to lower demand for petroleum products and annual maintenance and installation shutdown for some plants.

  • Fertiliser production continued to decline for the second consecutive month. The fall in production has been sharper in March 2021 by 5 per cent compared with 3.7 per cent in February 2021 but is better than 11.8 per cent decline in March 2020. The YoY decline is the sharpest in the last one year.

  • Steel (23 per cent), cement (32.5 per cent) and electricity (21.6 per cent) have registered positive growth of above 20 per cent during March 2021 and is primarily on account of a statistical base effect. However, year-end phenomenon of infrastructure projects being on track coupled with State governments and Central government expediting capex plans have provided the impetus and the same is reflected in the numbers. Sequentially too all three sectors have registered a notable pickup. In case of steel, producers ramped up production backed by higher export demand and realisations.

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The March, April and May 2021 growth numbers for core sector and industrial growth was expected to be high on the back of sharp declines registered last year. The core sector growth numbers for the next two months are likely to be elevated as the decline in April and May 2020 were sharper than March 2020. Hence, we must be cautious in reading the growth numbers for the next two months also as the theme of March 2021 is likely to carry forward. IIP growth for March 2021 is likely to be closer to double-digit mark given the decline of 16.7 per cent last year.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hedem who is Associate Economist with CARE Ratings. He can be contacted at: sushant.hede@careratings.com | +91-22-6837 4348.

Disclaimer: This report is prepared by CARE Ratings Limited. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis / inferences / views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

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India, EU Resume Talks To Finalise Free Trade Agreement

High-level negotiators meet in Delhi to push balanced trade deal

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A senior delegation from the European Union (EU) is in New Delhi from 3 to 7 November 2025 to hold detailed discussions with Indian counterparts on the proposed India–EU Free Trade Agreement (FTA). The negotiations aim to resolve key pending issues and move closer to a comprehensive, balanced, and mutually beneficial trade framework.

The visit follows Union Minister of Commerce and Industry Piyush Goyal’s official trip to Brussels on 27–28 October 2025, during which he held forward-looking talks with European Commissioner for Trade and Economic Security Maroš Šef?ovi?. Both sides reaffirmed their commitment to intensify dialogue and strengthen cooperation towards finalising the FTA.

This week’s deliberations will focus on trade in goods and services, rules of origin, and technical and institutional matters, guided by the shared goal of creating a modern and future-ready trade pact that reflects the priorities and sensitivities of both India and the EU.

The discussions gained further momentum after a virtual meeting on 3 November 2025 between Minister Piyush Goyal, Commissioner Maroš Šef?ovi?, and EU Commissioner for Agriculture and Food Christophe Hansen, which helped align positions on key areas of mutual interest.

As part of the ongoing negotiations, Ms. Sabine Weyand, Director-General for Trade at the European Commission (EU DG Trade), will visit New Delhi on 5–6 November for high-level consultations with India’s Commerce Secretary Rajesh Aggarwal. The talks will address technical and policy matters critical to concluding the agreement.

The EU delegation’s visit underscores the shared determination of India and the European Union to conclude a fair, transparent, and equitable FTA, aimed at boosting trade, investment, innovation, and sustainable economic growth.

Both sides view the FTA as a strategic pillar in their partnership, capable of enhancing market access, creating new opportunities for businesses, and promoting a resilient and diversified global supply chain.

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Om Birla: World Sees India as a Key Investment Destination

Speaker says India’s democracy and growth draw global confidence

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Lok Sabha Speaker Om Birla on Thursday said that the world is increasingly looking to invest in India, drawn by its vibrant democracy, rapid economic expansion, and technological prowess. Speaking at the 125th Anniversary Celebrations of the Bharat Chamber of Commerce in Kolkata, themed “India@100: An Age of a New Dawn,” Birla said that under the visionary leadership of Prime Minister Narendra Modi, the nation is steadily advancing towards becoming a global economic powerhouse.

He emphasised the government’s commitment to building a business-friendly environment, driven by the principles of minimum government, maximum governance. The administration, he said, is focused on reducing bureaucratic hurdles, expanding industrial capacity, and encouraging innovation. Birla also urged the private sector to invest more in research and development (R&D) and strive to meet global standards, assuring that the government will complement such efforts to strengthen India’s innovation-led growth.

Praising the Bharat Chamber of Commerce, Birla called it a source of inspiration for business chambers across India. He lauded its 125-year legacy of resilience, foresight, and public service, recalling its origins as the Marwari Chamber of Commerce. The Chamber, he noted, has played a key role in India’s industrial, social, and economic transformation and in promoting corporate social responsibility.

Birla observed that India’s success as a democracy lies in its stability, inclusiveness, and deep cultural roots. “Democracy in India is not just a system of governance, but a way of life,” he said, adding that the nation’s robust institutions ensure policy continuity and investor confidence, both crucial for long-term growth.

He stressed that where democracy thrives, sound policy decisions and effective implementation follow, creating a foundation for sustainable development. Birla also highlighted India’s rise as a global innovation hub, driven by strong public–private partnerships in technology and R&D, which are propelling India into leadership positions in emerging industries.

Touching on inclusive growth, Birla noted that the increasing participation of women and youth reflects India’s social transformation. He highlighted women’s growing role across sectors and said they will remain pivotal in shaping a self-reliant and developed India. Similarly, he praised India’s youth and entrepreneurs for driving creativity, enterprise, and innovation, shaping the country’s future with energy and vision.

Reaffirming the vision of Atmanirbhar Bharat, Birla called for stronger collaboration among industry, government, and academia to build a resilient, self-sustaining economy. He also underlined India’s emerging leadership in clean and green energy, expressing confidence that the country will play a leading role in addressing climate and environmental challenges globally.

Acknowledging West Bengal’s historical contribution to India’s growth, Birla said the state has long been a cradle of intellectual, cultural, and industrial excellence. He noted that Bengal has produced eminent thinkers, reformers, poets, and industrialists, and continues to inspire the nation with its enduring spirit of innovation and enterprise.

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Mumbai Metro, Monorail Told To Submit Disaster Plans

BMC orders SOPs and drills to strengthen emergency preparedness

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The Brihanmumbai Municipal Corporation (BMC) has directed Mumbai’s monorail and metro operators to submit detailed emergency management plans and Standard Operating Procedures (SOPs) for review, as part of efforts to bolster the city’s overall disaster preparedness framework.

The directive was issued during a meeting of civic authorities responsible for disaster management, held at the BMC headquarters on Wednesday. The session was convened to assess Mumbai’s emergency response mechanisms following the monorail breakdown near Bhakti Park, Chembur, on 19 August, which left several passengers stranded for hours due to a technical malfunction.

Dr Vipin Sharma, Chairperson of the Mumbai Suburban District Disaster Management Authority and Additional Municipal Commissioner (Western Suburbs), emphasised that the city’s monorail and metro systems must be integrated comprehensively into Mumbai’s emergency management strategy. He noted that these rapidly expanding networks require independent consideration given their critical role in public mobility.

Dr Ashwini Joshi, Chairperson of the Mumbai City District Disaster Management Authority and Additional Municipal Commissioner (City), instructed that mock drills be held regularly at all metro and monorail stations to assess and enhance emergency response capabilities.

Meanwhile, Dr Amit Saini, Additional Municipal Commissioner (Eastern Suburbs), said the session was aimed at reviewing coordination and readiness among key agencies in light of Mumbai’s expanding transport infrastructure. He stressed the importance of inter-agency collaboration to ensure rapid and efficient response during emergencies.

Professor Dr Ravi Sinha from the Indian Institute of Technology (IIT) Bombay commended the coordinated handling of the August 19 monorail incident, which involved the BMC’s disaster management department, Mumbai Fire Brigade, and other civic response teams.

Officials concluded that strengthening communication channels, training exercises, and real-time coordination between agencies would be central to improving the city’s ability to respond swiftly to future incidents involving its transport systems.

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