New Delhi: India’s industrial engine picked up real speed last month. Data released by the Commerce and Industry Ministry on Wednesday showed the country’s core sector output grew 7.9 per cent year on year in September, the fastest pace recorded in the new Index of Core Industries series. The reading is a sharp step up from August’s revised 5.9 per cent and comfortably ahead of the 3.1 per cent growth seen in the same month last year.
The provisional index stood at 118.3 in September, compared with 109.6 a year earlier. For the first half of the fiscal year, April to September, cumulative core sector growth came in at 5.1 per cent, more than double the 2.5 per cent expansion recorded in the corresponding period of the previous year. The numbers suggest industry is entering the festive quarter with genuine momentum behind it.
What the numbers show
Six of the nine industries in the index expanded during the month, with the heavyweights doing the lifting. The sector-wise break-up for September looks like this:
- Iron ore: 18.4 per cent growth, the fastest of any sector, up from 5.5 per cent in August
- Electricity: 11.4 per cent, slightly slower than August’s 13.1 per cent but still strong; electricity carries the highest weight, 31 per cent, in the index
- Coal: 10.7 per cent, a sharp turnaround from a 3.8 per cent contraction in August
- Refinery products: 10.3 per cent, a series high, accelerating from 5.6 per cent in August; refinery products are the second-heaviest component at 23 per cent
- Cement: 9.8 per cent, cooling a touch from 11.7 per cent in August
- Steel: 4.9 per cent, improving from 3.5 per cent in August
August’s numbers were also revised upwards in the release. The August index moved to 120.4 from the provisional estimate of 119.2, lifting that month’s growth rate to 5.9 per cent from 4.8 per cent.
What drove the jump
Economists read the September surge as a mix of real demand and a helpful statistical base. Aditi Nayar, chief economist at ICRA, noted that the uptick was broad-based, with seven of the nine sectors improving their performance in September compared with August. She pointed out that while coal and iron ore were aided by a low base, the sequential jump in coal output was genuinely strong, coming as power plants ran down their coal stocks and had to restock.
Electricity generation, which has stayed in double digits for months, stayed robust partly because a patchy monsoon kept demand elevated. Refinery throughput climbed to a series high, a sign that fuel demand and export orders for refined products are holding up. Together, these four industries account for the bulk of the index’s weight, so their double-digit showing pulled the headline number up decisively.
The weak spots are still there
The report card is not clean everywhere. Three of the nine industries contracted in September:
- Fertilisers: down 11.7 per cent, the seventh straight month of decline, though the contraction narrowed from 12.4 per cent in August
- Natural gas: down 4.6 per cent, compared with a 4.9 per cent fall in August
- Crude oil: down 1.4 per cent, improving from a 3.6 per cent decline the previous month
The prolonged slide in natural gas and crude output remains the index’s stubborn drag, reflecting constraints in domestic production rather than demand. Fertiliser output has now contracted for seven consecutive months, a trend worth watching as the rabi sowing season gets under way.
What it means for the economy
Core industries are the backbone of industrial activity, and a 7.9 per cent print is the kind of number that feeds into stronger factory output in the months ahead. The question economists are now asking is whether this strength shows up in the broader Index of Industrial Production, whose September data lands on October 28. Analysts are divided on that call: the core sector number is encouraging, but one month of data does not settle the industrial outlook.
For now, though, the takeaway is straightforward. The first half of the fiscal has grown at twice last year’s pace, the heavy industries are firing, and industry is in better shape heading into the festive season than it has been in a long while.
FAQs
What is the Index of Core Industries?
It is a monthly index published by the Commerce and Industry Ministry that tracks the combined output of nine infrastructure industries: coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity and iron ore.
How fast did India’s core sector grow in September?
The sector grew 7.9 per cent year on year in September 2026, the fastest pace in the new index series, which uses 2022-23 as its base year.
Which industries grew the fastest in September?
Iron ore led with 18.4 per cent growth, followed by electricity at 11.4 per cent, coal at 10.7 per cent and refinery products at a series-high 10.3 per cent.
Which industries contracted in September?
Fertilisers contracted 11.7 per cent, natural gas fell 4.6 per cent and crude oil declined 1.4 per cent.
When does the next industrial production data come out?
The official Index of Industrial Production data for September is scheduled for release on October 28.
For more on the state of the Indian economy, follow Informeia’s Economy section. We will keep tracking the industrial data as it lands.
