5 hrs ago
India Core Sector Growth Slows to Three-Month Low
India tracks nine important industries to see how its economy is performing.
Their combined production grew 4.8% in August.
That was slower than the growth recorded in July and August last year.
Coal, natural gas, crude oil and fertiliser production fell.
Fertiliser production has now fallen for six months in a row.
Problems with energy supplies and high prices hurt some industries.
Electricity and cement production grew strongly and helped support the total.
Economists disagree about how quickly industrial growth will move in the coming months.
Output growth across India’s nine core sectors fell to 4.8% in August, down from 5% in July and 6.2% a year earlier.
Six sectors weakened, with coal, iron ore, natural gas, crude oil and fertiliser among the main drags.
Fertiliser output contracted 12.4% for a sixth consecutive month, while coal, natural gas and crude oil also declined.
Electricity generation grew 11.6% and cement output rose 12.5%, partly offsetting weaker mining and energy performance.
Economists expect industrial production growth to ease to about 5-6% in August, though some forecast stronger near-term core-sector growth.
- Who
- India’s nine core industries, the Department for Promotion of Industry and Internal Trade, and economists cited from India Ratings and Research, Bank of Baroda, ICRA and Pantheon Macroeconomics.
- What
- Growth in core-sector output slowed to 4.8% in August, a three-month low.
- Where
- India’s nine core infrastructure sectors.
- When
- The data was released on September 21, 2026, covering August 2026.
- Why
- Growth was weakened by declines in mining, energy and fertiliser output, alongside energy-resource constraints, high prices, gas shortages and unfavourable base effects.
More Optimistic Outlook
Cautious Outlook
Near-term core-sector growth
More Optimistic Outlook
India Ratings and Research expects core-sector growth of around 5% in September and October 2026. Pantheon Macroeconomics also said headline growth should re-accelerate in the near term.
Cautious Outlook
ICRA expects industrial production growth to ease to approximately 5-6% in August from 6.7% in July, citing weak fertiliser and steel performance.
Industrial production forecast
More Optimistic Outlook
Bank of Baroda expects Index of Industrial Production growth of 6-6.5%, supported by refinery products and domestic consumption.
Cautious Outlook
ICRA expects slower growth because core output excluding electricity rose only 1.6% in August, compared with 3.4% in July.
Main explanation for the slowdown
More Optimistic Outlook
Some economists attributed part of the weakness to unfavourable base effects, while strong electricity demand, cement production and domestic demand indicate underlying resilience.
Cautious Outlook
Other analysis highlighted energy-resource availability, high prices, gas shortages, rainfall-related mining disruption and the unresolved West Asia crisis as continuing risks.
Key facts
- August core-sector growth
- 4.8%
- July growth
- 5.0%, revised down from 5.4%
- August 2025 growth
- 6.2%
- Fertiliser output
- Down 12.4%; sixth consecutive monthly contraction
- Electricity output
- Up 11.6% in August
- Cement output
- Up 12.5% in August
- April-August growth
- 4.3%, compared with 2.4% in the same period of 2025-26
- New index coverage
- Nine sectors accounting for 32.88% of the Index of Industrial Production
Quotes
State Bank of India’s research department
Research department of the State Bank of India
“The data reflects healthy underlying domestic demand, particularly for infrastructure and power consumption. The expansion in cumulative growth underscores a strengthening industrial base moving into the second half of 2026.”
financialexpress.com
“The main drag on the headline came from a continued and sharp moderation in iron ore growth, to 5.5% from 29.5%, reflecting unfriendly base effects and a further weakening of short-term trends”
financialexpress.com
