Core sector growth slips to 3-month low of 3% in Sep as energy output fall

Core sector growth eased to a 3-month low in September as output in coal, crude oil, refinery, and gas declined, even as steel demand stayed robust

Despite a favourable low base effect, growth in India’s eight core industries plunged to a three-month low of 3 per cent in September from an upward revised figure of 6.5 per cent in August, data released by the Ministry of Commerce and Industry (MCI) on Tuesday showed.

 

The slowdown in core sector growth during September comes on the back of a decline in the output of four energy sectors, as the data once again showed dualistic growth, with infrastructure-based industries doing well, and energy segments registering negative growth rates.

 

After a positive showing in August, output in coal (-1.2 per cent), crude oil (-1.3 per cent), and refinery products (-3.7 per cent) declined in September. Meanwhile, natural gas output (-3.8 per cent) fell for the 15th consecutive month, data showed.

 

In September 2024, the Index of Core Industries (ICI) had registered a growth of 2.4 per cent. For the first half (April-September) of 2025-26 (H1FY26) growth stood at 2.9 per cent against 4.3 per cent during the same period last year.

 

Among the four infrastructure sectors, the output in steel production (14.1 per cent) accelerated, thus marking the third consecutive month of double-digit growth, reflective of the strong demand from the construction sector, which is being propelled by government capex.

 

Growth in the remaining infrastructure sectors like fertilisers (1.6 per cent), cement (5.3 per cent), and electricity (2.1 per cent) decelerated during the month. While cement output hit its lowest levels since October 2024, electricity output was at its lowest since June 2025.

 

The eight core sectors constitute 40.27 per cent of the Index of Industrial Production (IIP), which had risen to a four-month high of 3.5 per cent in July from 1.5 per cent in June, led by a broad-based improvement across all sectors.

 

Data released by the National Statistics Office (NSO) on September 29 showed that growth in the industrial production moderated to 4 per cent in August from an upwardly revised figure of 4.3 per cent in July, on the back of a slowdown in manufacturing sector growth.