India's Core Sector Sees 7.9% Growth in September Amid Uncertainty

Data released by the Ministry of Commerce and Industry revealed that India’s core sector, which comprises nine critical infrastructure industries, grew by 7.9 per cent in September. This marks an increase from 5.9 per cent in August and represents the highest growth rate in 30 months. In September last year, the core sector recorded a growth of just 3.1 per cent.

The core sector includes industries such as coal, natural gas, crude oil, refinery products, fertilisers, steel, cement, electricity, and iron ore. Significant contributions to the growth rate in September were seen in iron ore, electricity, and cement production. Specifically, iron ore output surged by 18.4 per cent, electricity generation increased by 11.4 per cent, coal production grew by 10.7 per cent, and output from refinery products expanded by 10.3 per cent. Additionally, cement production rose by 9.8 per cent and steel production increased by 4.9 per cent compared to the same month last year.

Despite these positive figures, three sectors experienced notable declines. Fertiliser production contracted by 11.7 per cent in September, marking its seventh consecutive month of decline, though the rate of contraction was slightly less severe than the 12.4 per cent drop recorded in August. Natural gas output fell by 4.6 per cent, continuing its long-term decline, while crude oil production saw a decrease of 1.4 per cent, a slight improvement from a 3.6 per cent drop in the previous month.

For the period between April and September 2026, the overall core sector growth stood at 5.1 per cent, a significant increase compared to 2.5 per cent during the same timeframe last year.

Nirmal K Minda, President of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), commented on the growth figures, stating, "This positive trend will strengthen investor confidence, support manufacturing, generate employment and reinforce India’s growth trajectory."

Madan Sabnavis, Chief Economist at Bank of Baroda, noted the strong performance in infrastructure sectors, attributing it to increased government spending. He highlighted that enhanced expenditure on roads had boosted cement demand, while investments in railways supported the demand for iron and steel. The heatwave in September also drove higher electricity demand, contributing to the substantial growth in the sector.

The overall economic environment remains complex, as exports have also aided growth, although the oil sector faced challenges due to high levels of imports. Sabnavis projected an industrial production growth rate between 7.5 and 8.5 per cent for September.

Aditi Nayar, Chief Economist at ICRA, remarked that the latest figures showed the fastest growth in the new series and were supported by a favourable base effect. Although the growth was broad-based with improvements in seven of the nine sectors, she cautioned that the growth in industrial production might ease to between 6 and 7 per cent for September, down from 8.0 per cent in August, due to the higher base affecting the non-core segment.

The latest data continues to highlight the resilience of India's core infrastructure industries while underlining the mixed outlook for industrial growth in the coming months.