Core sector growth eases to 4% in January as energy output remains weak

Government capex has been supportive of these sectors, with growth in the cement sector remaining in double digits for a third consecutive month.

India’s eight core infrastructure industries recorded slower growth of 4 percent in January 2026, easing from 4.7 percent in December, according to government data released on February 20.

The moderation reflects continued weakness in energy-related sectors even as steel, cement and electricity maintained positive momentum.

Among individual sectors, steel output remained robust with 9.9 percent growth, while cement production rose 10.7 percent, indicating sustained construction and infrastructure activity. Electricity generation also expanded by 3.8 percent, supporting overall output.

Government capex has been supportive of these sectors, with cement sector growth remaining in double digits for a third consecutive month.

“Steel and cement have registered 9.9 percent and 10.7 percent notwithstanding the high base effect. This is reflective of strong investment in the economy in infrastructure led by the central government with states also chipping in. This is also reflective of higher housing activity in the economy which appears to be stable,” said Madan Sabnavis, chief economist, Bank of Baroda.

However, the energy segment continued to drag overall performance. Crude oil output contracted 5.8 percent and natural gas production fell 5 percent, extending a trend of declining domestic hydrocarbon production. Refinery products recorded flat growth, pointing to stable but subdued demand conditions.

Coal production grew 3.1 per cent, a moderation compared with earlier months but still positive, while fertiliser output expanded 3.7 per cent, suggesting steady demand for agricultural inputs.

The eight core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — together account for about 40 percent of India’s Index of Industrial Production (IIP) and serve as an early indicator of industrial momentum.