India's core sector output contracts in March
What's the story
India's core sector output contracted by 0.4% year-on-year (YoY) in March, the first decline in five months. The contraction was mainly due to a fall in production across four of the eight sectors, including coal, crude oil, fertilizers, and electricity. This is a sharp contrast from the 2.8% growth recorded in February this year.
Sector-wise performance
Fertilizer production declines steeply
Fertilizer production witnessed the steepest decline, contracting by 24.6% in March. Coal output fell by 4%, crude oil production declined by 5.7%, and electricity generation slipped by 0.5%. However, there were some gains too: natural gas output rose sharply by 6.4%, cement production increased by 4%, steel output grew marginally at 2.2%, while refinery products saw a slight uptick of just about 0.1%.
Industrial impact
Core sectors account for over 40% weightage of IIP
The eight core industries: coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity, account for 40.27% of the weight of the Index of Industrial Production (IIP). This makes them a key indicator of industrial activity in India. For the entire financial year 2025-26 (FY26), cumulative growth in these sectors slowed to 2.6%, down from 4.5% in FY25.
Annual growth
How did these sectors perform during FY26?
During FY26, steel production rose by an impressive 9.1% and cement output increased by a healthy 8.6%. Electricity generation also saw some growth at 0.9%. However, crude oil and natural gas output both fell by 2.8%, while coal production slipped marginally at 0.5%. Refinery products and fertilizers also saw a slight dip of just about 0.1% each during this period.