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India’s Core Sector Growth Eases to 5.4% in July
India’s main infrastructure industries produced 5.4% more in July 2026 than in July last year.
This was slower than their revised 6% growth in June.
Iron ore, cement, electricity and coal helped lift the total.
Steel and refinery products also grew, but more slowly.
Natural gas, crude oil and fertiliser production fell.
Fertiliser output has now declined for five months in a row.
Economists said the mixed results could mean that overall factory growth slows in July.
Cement growth suggested that construction activity may have remained healthy.
Core-sector output grew 5.4% year-on-year in July 2026, down from revised 6% growth in June and up from 3.2% in July 2025.
Iron ore, cement, electricity and coal led July’s expansion, rising 29.5%, 13.1%, 9% and 7.6%, respectively.
Steel and refinery-product output increased 2.9% and 2.7%, while refinery products returned to growth after contracting in June.
Natural gas, crude oil and fertiliser production declined 3.7%, 5.3% and 8%; fertiliser output fell for a fifth consecutive month.
Cumulative core-sector growth reached 4.3% in April-July 2026, compared with 1.5% in the same period a year earlier.
- Who
- India’s core industries, the Ministry of Commerce and Industry, the Department for Promotion of Industry and Internal Trade, and economists Aditi Nayar and Devendra Pant.
- What
- Core-sector output grew 5.4% year-on-year in July 2026, easing from revised 6% growth in June.
- Where
- India; one report was datelined New Delhi.
- When
- July 2026; the provisional data was released on August 20, 2026. Overall industrial-growth data for July was scheduled for August 28.
- Why
- Growth was supported by iron ore, cement, electricity and coal, but was moderated by slower growth in some sectors and contractions in natural gas, crude oil and fertilisers.
Official Data
Economist Interpretation
Overall performance
Official Data
Official data showed 5.4% growth in July, with six sectors—iron ore, electricity, cement, steel, refinery products and coal—in positive territory.
Economist Interpretation
Economists described the recovery as uneven because iron ore, electricity and steel growth slowed, while crude oil and fertiliser contractions deepened.
Industrial outlook
Official Data
Cumulative core-sector growth reached 4.3% in April-July, substantially above the 1.5% recorded a year earlier.
Economist Interpretation
ICRA expects overall industrial production growth to moderate to around 6%-6.5% in July from 7.3% in June, while India Ratings and Research expects growth below 6%.
Reasons for sector movements
Official Data
Stronger cement, coal and refinery-product output provided support to the July index, while the official data recorded contractions in three sectors.
Economist Interpretation
Aditi Nayar attributed iron ore’s moderation partly to an unfavourable base and said it reduced the monthly core-sector print by about 95 basis points; Devendra Pant said weaker electricity growth may reflect lower demand after temperatures fell.
Index coverage and weighting
Official Data
Reports using the older ICI series describe eight sectors with a 40.27% share of the IIP.
Economist Interpretation
The revised series uses a 2022-23 base year, covers nine sectors and assigns them a 32.88% IIP weight, compared with the old series’ 2011-12 base and 40.27% weighting.
Key facts
- July core-sector growth
- 5.4% year-on-year, compared with 3.2% in July 2025
- June revision
- June growth was revised to 6% from 5%; the June index was revised to 120.7 from 119.6
- April-July growth
- 4.3%, compared with 1.5% in April-July 2025
- Top July performer
- Iron ore output rose 29.5%, its third consecutive month of double-digit growth
- Largest July contraction
- Fertiliser production fell 8%, marking its fifth consecutive monthly contraction
- Cumulative leaders
- Iron ore, cement and electricity grew 25.2%, 9.9% and 9.3%, respectively, during April-July 2026
- Industrial outlook
- ICRA expects July IIP growth of about 6%-6.5%; India Ratings and Research expects it to remain below 6%
Quotes
ICRA Chief Economist Aditi Nayar
Head of ICRA's economic analysis
“the recovery in cement output was likely supported by inventory replenishment after construction activity was affected by the extended monsoon-related disruption in June”
firstpost.com
“This alone exerted a downward pressure to the tune of 95 basis points on the core output print in July relative to the previous month”
financialexpress.com
Devendra Pant
Chief economist, India Ratings and Research
“Slowdown in electricity generation was possibly due to reduced demand, following temperature reduction unlike peak summers”
financialexpress.com
Sources
India’s core sector scorecard: Core sectors propelling Indian economy vs those pulling it down
Nine core sectors growth slows down to 5.4% in July
Core sector growth slows to 5.4 per cent in July as iron ore, power output ease
Core industries growth slows to 5.4% in July as natural gas, crude oil, fertilisers contract
Core sector growth eases to 5.4% in July from 6% in June; iron ore, cement drive expansion
Core sector output growth eases to 5.4% in July
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