Core Sector Output Rises 4 Percent in January as Growth Momentum Moderates

India’s core sector output rose 4 percent year on year in January 2026, indicating continued expansion in key infrastructure linked industries even as the pace of growth moderated from the revised 4.7 percent recorded in December. The latest government data signals resilience in industrial activity, supported primarily by strong performances in steel, cement and electricity.

The Index of Eight Core Industries, which accounts for over 40 percent of the weight in the Index of Industrial Production, serves as an early indicator of broader industrial trends. In January, steel production posted robust growth, reflecting sustained demand from construction, infrastructure and manufacturing sectors. Cement output also expanded at a healthy pace, underlining ongoing activity in housing and public works projects across the country.

Electricity generation registered steady growth, pointing to stable consumption patterns from both industrial and residential segments. Fertilizer production recorded moderate gains, supported by seasonal demand and agricultural activity.

However, the overall growth momentum was tempered by declines in crude oil and natural gas production. Lower output in these segments continues to weigh on the energy basket, highlighting structural challenges in domestic exploration and production. Petroleum refinery products remained largely stable during the month.

On a cumulative basis, core sector growth for the April to January period stood at 2.8 percent, compared with the corresponding period last year. While this reflects a moderation, policymakers and industry participants view the steady expansion in construction linked sectors as a positive signal for investment sentiment.

Going ahead, the trajectory of infrastructure spending, execution of large public projects and stability in commodity prices will play a critical role in shaping core sector performance in the coming months.