New Delhi: India’s core sector output expanded 4%. year-on-year in January 2026, driven by strong growth in steel and cement even as crude oil and natural gas production continued to contract.
According to provisional data on the Index of Eight Core Industries (ICI), the January expansion was lower than the revised 4.7% growth recorded in December 2025, but it marked a steady improvement compared with much of the current financial year. The cumulative growth for April-January 2025-26 stood at 2.8%, reflecting a moderate recovery in key infrastructure-linked industries.
The ICI tracks the performance of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. Together, these sectors account for 40.27% of the weight in the Index of Industrial Production (IIP), making them a crucial barometer of industrial momentum.
January’s growth was led by construction-linked segments. Steel output rose 9.9% year-on-year, while cement production climbed 10.7%, signalling sustained activity in infrastructure and real estate projects. Over the April-January period, steel and cement output grew 9.8% and 9.1% respectively, underscoring their role as the main drivers of core sector expansion.
Electricity generation increased 3.8% in January, indicating steady power demand, while fertiliser output rose 3.7%. Coal production registered a 3.1% increase during the month, although its cumulative output for the financial year so far remained marginally lower compared with the previous year.
In contrast, the hydrocarbons segment continued to weigh on overall growth. Crude oil production declined 5.8% year-on-year in January, while natural gas output fell 5%. Both sectors also posted cumulative contractions for the April-January period, reflecting structural challenges in domestic upstream production. Petroleum refinery output remained flat compared with January last year, with only a marginal 0.1% cumulative rise during the financial year to date.
Data for December 2025 have been finalised, while January 2026 figures remain provisional and are subject to revision based on updated inputs from source agencies. The next set of core sector data, for February 2026, is scheduled for release on March 20, 2026.
The core sector numbers are closely watched for their impact on broader industrial output trends and for signals on the strength of investment and infrastructure activity in the final quarter of the financial year.