India’s Core Sector Growth Hits Record 7.9% in September 2026

India’s core sector growth accelerated to 7.9% in September, supported by strong coal, refinery, electricity and iron ore output, alongside infrastructure spending and favourable base effects.

India’s Core Sector Output Growth Hits Record 7.9% in September

Core Sector Growth Accelerates to a Series High

India’s core sector output growth reached a series high of 7.9% in September, accelerating from 5.9% in August and 3.1% in September last year. The improvement was driven by stronger production across coal, electricity, refinery products and iron ore, supported partly by a favourable base effect.

The September figure is the fourth reading calculated using the revised Index of Eight Core Industries series, which adopts 2022-23 as its base year instead of 2011-12. The updated series also incorporates iron ore, expanding the coverage to nine core industries.

The latest performance indicates improved momentum in several infrastructure-linked sectors, although some industries continued to experience production declines.

Infrastructure Spending Supports Industrial Production

According to Madan Sabnavis, Chief Economist at Bank of Baroda, the core sector recorded strong growth in infrastructure-related activities, where government expenditure has supported demand.

Spending on road development helped boost cement demand, while railway investment supported iron and steel production. These trends highlight the influence of public infrastructure projects on industrial activity and the demand for construction materials.

The core sector is an important indicator of economic momentum because its industries supply essential inputs to manufacturing, construction, transportation and energy-related activities.

Refinery Products, Coal and Iron Ore Lead Growth

Refinery Products Record Strongest Growth

Refinery products registered year-on-year growth of 10.3% in September, compared with 5.6% in August. This was the strongest increase recorded for the segment under the revised series, contributing significantly to the overall improvement in core sector output.

Coal Production Returns to Growth

Coal production expanded by 10.7% in September after contracting by 3.8% in August. The turnaround provided a significant boost to the overall index and reflected stronger performance in one of the country's key energy industries.

Iron Ore Output Surges

Iron ore production increased by 18.4% in September, substantially higher than the 5.5% growth recorded in the previous month. The sharp rise supported the broader mining and metals supply chain, including industries linked to steel production.

Electricity, Steel and Cement Maintain Growth

Electricity generation grew by 11.4% in September, moderating from 13.1% in August. Despite the slowdown in its growth rate, electricity remained one of the stronger-performing components of the core sector.

Steel production growth improved to 4.9% from 3.5% in the previous month. The increase was consistent with stronger activity in infrastructure and construction-related sectors.

Cement production expanded by 9.8% year-on-year in September, compared with 11.7% in August. Although its growth rate eased, cement continued to benefit from demand associated with construction and public infrastructure development.

Together, these industries remain closely connected to investment activity, construction projects and the wider industrial economy.

Fertiliser, Natural Gas and Crude Oil Face Contractions

Not all core industries recorded positive growth in September. Fertiliser production declined by 11.7%, continuing its contraction and emerging as a weak point in the latest data.

Natural gas output fell by 4.6%, while crude oil production contracted by 1.4%. These declines indicate that the improvement in the overall core sector was uneven, with energy-related segments experiencing different production trends.

The contrasting performance across industries highlights the importance of examining individual components alongside the headline growth figure.

Core Sector Performance and Industrial Growth Outlook

The core sector accounts for 40.27% of the Index of Industrial Production (IIP), making its performance an important indicator for assessing broader industrial activity.

Following the September data, Bank of Baroda projected IIP growth of 7.5% to 8.5% for the month. ICRA, meanwhile, expected industrial production growth to moderate to between 6% and 7%, compared with 8% in August.

The differing estimates reflect variations in expectations for how core sector performance and other industrial indicators will translate into overall factory output.

Conclusion

India’s core sector growth climbed to 7.9% in September, supported by strong refinery, coal and iron ore production, alongside continued infrastructure-related demand. However, falling fertiliser, natural gas and crude oil output revealed uneven performance across industries. The latest figures point to stronger momentum in key sectors, while upcoming industrial production data will help clarify the broader economic outlook.