India's core growth loses steam, slows to 3% in Sept
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India's core growth loses steam, slows to 3% in Sept
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Oct. 21, 2025
New Delhi: A contraction in the output of coal, crude oil, refinery products and natural gas dragged India's core sector down to a three-month low of 3% in September from 6.5% in August, data released by the commerce and industry ministry Tuesday showed.
The eight infrastructure industries had grown 2.4% in September 2024.
Refinery products output contracted 3.7%, while natural gas and crude oil production shrank 3.8% and 1.3%, respectively, in the month.
Coal, crude oil, refinery products and natural gas a drag while steel, cement, power and fertiliser record positive growth
Coal production, which rose 11.4% in August, contracted 1.2% in September, data showed.
"The production of steel, cement, electricity and fertilizer recorded positive growth in September 2025," the ministry said in a statement.
Steel output rose 14.1% year-on-year while cement production was up 5.3%, and electricity generation grew 2.1%. Fertiliser output rose 1.6% year-on-year in September.
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"The core sector growth remained volatile in September, dipping to a three-month low of 3%, dampened by a contraction in half its constituents. The continued double-digit expansion in steel prevented an even more tepid performance of the core industries in this month," said Aditi Nayar, chief economist, ICRA.
The core sector comprising coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity contribute 40.27% to the Index of Industrial Production (IIP), which measures industrial activity.
The IIP had grown 4% in August.
"Overall, mining and quarrying, and electricity gross value-added growth is likely to be weak in the second quarter of FY26," Nayar said.
In the first half of 2025-26, the core sector grew 2.9% against 4.3% in the corresponding period last year with five sectors witnessing a contraction in growth. Only steel, cement and electricity production have grown in the April-September period of FY26.
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