India Core Sector Growth Reaches 7.9% as Coal and Refinery Output Strengthen

Summary

India’s core industries expanded 7.9% year on year in September 2026, accelerating from August’s revised 5.9%. Iron ore, electricity, coal and refinery products recorded double-digit growth, while crude oil, natural gas and fertilisers contracted. First-half growth reached 5.1%, indicating stronger overall production despite uneven performance across sectors.

September growth strengthens

India core sector growth accelerated to 7.9% in September 2026, supported by higher production across six of the nine industries covered by the revised Index of Core Industries.

The provisional figures, released on 21 October, show improving annual growth in several industries supplying energy and materials to manufacturing and infrastructure activity.

August’s growth was revised upwards to 5.9% from the initial estimate of 4.8%. Its index level was correspondingly raised to 120.4 from 119.2.

The September result therefore represents a two-percentage-point acceleration over the revised August growth rate. However, the improvement was uneven, with three industries continuing to record lower production than a year earlier.

Iron ore leads, while coal rebounds

Iron ore production registered the strongest annual increase at 18.4%, followed by electricity at 11.4%, coal at 10.7% and refinery products at 10.3%.

Cement production rose 9.8%, while steel output increased 4.9%.

Coal’s performance marked a turnaround from August’s 3.8% contraction. Refinery growth also strengthened from 5.6%, while iron ore accelerated from 5.5%.

Electricity and cement maintained substantial annual gains, although their growth rates moderated from August’s 13.1% and 11.7%, respectively. Steel growth improved from 3.5%.

The comparisons show that September’s stronger headline reflected a combination of recovery in some sectors and continued expansion in others.

Energy extraction and fertilisers remain weaker

Fertiliser production fell 11.7% year on year, the sharpest contraction among the industries tracked. Natural gas output declined 4.6%, while crude oil production decreased 1.4%.

These declines contrasted with stronger refinery production, showing different conditions across the energy supply chain. Higher refinery output does not necessarily indicate an increase in domestic crude extraction.

The headline also needs to be distinguished from monthly movements. Although annual growth accelerated, the overall index fell from August to September. The year-on-year comparison was supported partly by the lower comparison base.

Production growth, therefore, should be assessed alongside sector-level trends and index levels rather than interpreted as uniform improvement across industrial activity.

First-half figures show a mixed industrial picture

During April–September 2026, core industries grew 5.1%, compared with 2.5% in the corresponding period a year earlier.

Iron ore output increased 21.2% over the six months. Electricity and cement rose 10.2% and 10.1%, respectively, while steel grew 4.3% and refinery products increased 1%.

Despite September’s rebound, cumulative coal production remained 1% below the previous year’s level. Natural gas declined 4.4%, crude oil fell 3.7% and fertilisers contracted 7.6%.

The half-year figures place the monthly improvement in perspective: stronger September production helped the overall performance, but several industries had yet to recover earlier weakness.

Revised index now covers nine industries

The figures use the revised index with 2022–23 as its base year, introduced in July 2026 to replace the previous 2011–12 series.

Iron ore was added as the ninth industry, alongside coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.

The revision also changed the steel measure from net production to gross production. For coal, the new series retains raw coal and excludes washed coal and middlings to avoid double counting.

These methodological changes matter when comparing current results with older reports. The September figures should be read within the revised framework, rather than described using the former eight-industry basket.

Production trends offer signals for logistics

For freight operators, the stronger coal, iron ore, steel and cement figures provide a useful indication of activity in industries associated with bulk cargo movements.

They do not establish equivalent growth in railway loading, coastal shipping or port throughput. Actual transport demand also depends on inventories, sourcing locations, domestic consumption and trade flows.

Similarly, refinery production alone cannot determine petroleum import or export volumes.

The practical implication is that logistics businesses should track these production indicators alongside cargo and trade data. September’s figures point to stronger annual industrial output, while the contrasting half-year performance argues for assessing each commodity separately.

October’s provisional core industries index is scheduled for release on 20 November 2026.

FAQs

How much did India’s core industries grow in September?

Output increased 7.9% year on year, based on provisional figures.

Which industry recorded the highest growth?

Iron ore, with production rising 18.4%.

Which industries contracted?

Fertilisers, natural gas and crude oil recorded annual declines.

How many industries does the index cover?

The revised index covers nine industries, including iron ore.

Does core sector growth measure cargo throughput?

No. It measures production; railway loading, port cargo and shipping volumes require separate data.