Core sector growth rises to four month high of 3.7% in December

Core sector growth in December

India’s core infrastructure output accelerated to a four-month high of 3.7 percent in December, rebounding from 2.1 percent in November, data released by the government showed. The pickup was led by stronger performance in steel, cement and electricity, even as oil and gas segments continued to drag.

The eight core industries—coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity—together account for about 40 percent of the Index of Industrial Production (IIP).

Steel and cement remained the standout performers in December, reflecting continued momentum in construction and infrastructure activity. Steel output grew 6.9 percent, while cement production rose a robust 13.5 percent, marking one of the strongest prints of the year. Electricity generation also turned supportive, expanding 5.3 percent--its fastest pace in nine months--after contracting in November.

Coal output growth improved to 3.6 percent, reversing weakness seen in October, though the trend across fuel-linked segments remained mixed. Crude oil production fell 5.6 percent, while natural gas output contracted 4.4 percent, underscoring persistent structural issues in domestic hydrocarbon production. Refinery products also remained in contraction at 1 percent.

While metals, cement and fertilisers have supported headline growth, fuel-linked sectors—crude oil, natural gas and refinery products—have remained a drag.

The December recovery in core sector output could provide a modest tailwind to industrial production in the coming months.