India’s core sector growth decelerated to 4% in January, signaling a slowdown in key infrastructure industries and raising concerns about overall industrial production.
Illustration: Dado Ruvic/Reuters
Key Points
- India’s core sector growth slowed to 4% in January, a two-month low, indicating a moderation in infrastructure output.
- Crude oil and natural gas production experienced negative growth, while refinery products output remained flat during January.
- Coal and cement production growth moderated compared to the previous year, impacting overall core sector performance.
- Fertiliser, steel, and electricity output showed positive growth, partially offsetting the decline in other sectors.
- Overall core sector growth for April-January period declined to 2.8%, compared to 4.5% in the corresponding period of the previous fiscal year.
Production growth of India’s eight key infrastructure sectors slowed down to a two-month low of 4 per cent in January, according to official data released on Friday.
It was 5.1 per cent in January 2025 and 4.7 per cent in December 2025.
Crude oil and natural gas output recorded negative growth in January. Production of refinery products remained flat.
Sector-Specific Performance
Production growth of coal and cement moderated to 3.1 per cent and 10.7 per cent during the month under review against 4.6 per cent and 14.3 per cent, respectively, in January 2025.
However, fertiliser, steel and electricity output recorded a positive growth during the month.
During the April-January period of this fiscal, growth of core sector industries was down to 2.8 per cent, compared with 4.5 per cent recorded during the corresponding period of the previous fiscal.
Economist’s Perspective
Commenting on the data, Aditi Nayar, Chief Economist, ICRA Ltd, said the slowdown was broad-based, with as many as seven of the 8 sectors witnessing a deterioration in their YoY growth performance.
“Given the trends in core output, IIP (Index of Industrial Production) growth is likely to slow down in January, although we expect the growth in the non-core part of the IIP to continue to outperform core industries’ output, as was the trend in Q3 FY2026,” she said.
She added, consequently, ICRA expects IIP growth to ease to about 5.5 per cent in January 2026 from 7.8 per cent in December 2025, while printing higher than the growth in core output for the month.
