Core sector contracts to -0.4 percent in March, lowest growth in 19 months

India’s core sector hit a 19-month low in March, shrinking by -0.4 percent. A record contraction in fertiliser production (-24.6 percent) and persistent weakness in crude oil, electricity, and coal weighed heavily on the headline number.The last time the core sector had fared worse was in August 2024, when it had contracted to -1.45 percent.The steepest drag came from fertilisers, which plunged -24.6 percent in March, the sharpest contraction the segment has recorded in recent memory and a sharp reversal from the 3.4 percent growth seen just a month earlier in February. Crude oil output continued its prolonged slump, falling 5.7 percent, while coal production declined by 4 percent.Electricity generation, which carries the second-highest weight in the index at nearly 20 percent, also slipped by 0.5 percent, adding to the broad-based weakness. This was its lowest reading since November 2025.The data comes at a time when the war in West Asia continues to loom over global energy markets and commodity supply chains, adding an element of external uncertainty to India’s domestic industrial outlook.The contraction is particularly striking given that four of the eight industries, which together account for 40.27 percent of the Index of Industrial Production (IIP), moved into the red simultaneously.However, not all sectors painted a grim picture. Steel production grew by 2.2 percent, while cement expanded by 4 percent, even as these figures were lower than the February print.Meanwhile, natural gas output rose by 6.4 percent in March. Petroleum refinery products, the category with the highest weightage among the eight sectors, managed a marginal 0.1 percent uptick, offering some cushion.For the full fiscal year 2025–26, the cumulative growth rate of the core sector stood at 2.6 percent, almost half of the stronger momentum seen in the previous financial year, when growth averaged 4.5 percent.

Go to News Site