Growth stood at 3.4% in February 2025.
Aditi Nayar, chief economist at ICRA, said the slowdown was broad-based, with year-on-year growth nearly halving sequentially. “Even before the start of the West Asia crisis, the growth of the core sector output in India had slowed,” she noted.
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Of the eight core industries, cement recorded the strongest expansion, rising 9.3% year-on-year in February, though lower than January’s 11.3%. Steel production grew 7.2%, easing from 11.5% in the month before.
“Infrastructure push by the government has helped steel and cement,” said Madan Sabnavis, chief economist at Bank of Baroda.
Among energy-related industries, refinery products output declined 1% year-on-year in February, while crude oil and natural gas production contracted by 5.2% and 5%, respectively. Economists expect the ongoing conflict in West Asia to impact the core sector, and industrial output going ahead.
“The impact of the Middle East escalation is likely to be felt in March,” said Gaura Sengupta, chief economist at IDFC First Bank.
“However, there could be a pickup in domestic petroleum production to safeguard domestic supplies,” she added.
Electricity generation growth dropped steeply to a three-month low of 0.5% from 5.2% in January. “The warmer weather will support electricity production in March,” noted Sengupta.
Fertilisers output fell to a five-month low of 3.4%, while coal output eased to a three-month low of 2.3%.
Overall, core sector growth stood at 2.9% in FY26 (till February), lower than 4.4% in the corresponding period last year.
The eight core industries account for 40.27% weight in the Index of Industrial Production (IIP). India’s industrial output slowed to a three-month low of 4.8% year-on-year in January, down from 8% in December.
ICRA projects IIP growth to moderate to around 4% in February, while Bank of Baroda estimates 3-3.5%.