India’s core sector output, measured by the Index of Eight Core Industries (ICI), contracted by 0.4 percent in March 2026 compared to the same month last year. The monthly decline was primarily fuelled by significant negative growth in the Fertilisers, Crude Oil, Coal, and Electricity sectors.
Fertiliser production fell by 24.6%, making it the single largest contributor to the monthly decline. Output also dropped in crude oil, coal, and electricity, indicating emerging supply-side pressures in the energy segment. These declines offset positive growth in natural gas, cement, and steel.
Despite the monthly contraction, overall performance for the year remained stable. Core sector output grew by 2.6 percent for FY 2025–26, reflecting moderate industrial activity. Steel and cement continued to expand, suggesting sustained demand from infrastructure and construction.
As core industries account for over 40 percent of the Index of Industrial Production (IIP), the March slowdown may signal softer industrial momentum in the near term, particularly if energy and input sectors remain weak.
Sector-wise Performance (March 2026)
Fertilisers (Weight: 2.63%): Recorded the steepest decline of 24.6%.
Crude Oil (Weight: 8.98%): Production fell by 5.7%.
Coal (Weight: 10.33%): Output decreased by 4.0%.
Electricity (Weight: 19.85%): Generation saw a marginal dip of 0.5%.
Natural Gas (Weight: 6.88%): Led the gainers with a 6.4% increase.
Cement (Weight: 5.37%): Production rose by 4.0%.
Steel (Weight: 17.92%): Output increased by 2.2%.
Petroleum Refinery Products (Weight: 28.04%): Remained nearly flat with 0.1% growth.
What is the "Index of Eight Core Industries (ICI)"?
The Index of Eight Core Industries (ICI) is a monthly indicator that tracks the production performance of eight high-impact sectors: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity. Because these industries produce the basic raw materials and energy needed for almost all other industrial activities, they are considered "core" to the economy.
A high ICI generally predicts a strong overall Index of Industrial Production (IIP), while a decline suggests a potential slowdown in broader manufacturing and construction activities.
Policy Relevance
Signals Industrial Slowdown Risk: A contraction in core industries, which drive over 40% of IIP, may translate into weaker overall industrial growth.
Highlights Energy Supply Constraints: Declines in coal, crude oil, and electricity point to supply-side pressures that can affect manufacturing and logistics.
Flags Agricultural Input Risk: The sharp fall in fertilizer output could affect availability and pricing ahead of the sowing season.
Indicates Construction Demand Stability: Continued growth in steel and cement suggests infrastructure and housing demand remains resilient.
Sets Baseline for Industrial Policy: Annual growth of 2.6% indicates moderate momentum, shaping expectations for FY 2026–27 policy calibration.
Follow the Full Data Here: INDEX OF EIGHT CORE INDUSTRIES FOR MARCH, 2026