India's eight core industries recorded a growth rate of 3% in September 2025, the lowest level in the last three months. This slowdown was due to a decline in the production of coal, crude oil, refinery products, and natural gas. While steel and electricity saw growth, the production of fertilizers and cement remained sluggish.
Core sector growth: The growth of India's eight major core industries stood at 3% year-on-year in September 2025, marking the lowest level in the past three months. According to government data, this sluggishness was attributed to a decline in the production of coal, crude oil, refinery products, and natural gas. Fertilizer and cement production also slowed, while steel and electricity recorded growths of 14.1% and 2.1% respectively. These industries contribute 40.27% to the Index of Industrial Production (IIP), which will impact economic activities.
Decline Compared to August
In August 2025, the production of these key industries had grown by 6.5 percent. In contrast, growth in September of the previous year was only 2.4 percent. This September's three percent growth indicates that the core sector has been experiencing the effects of a slowdown in recent months.
Major Reasons for the Decline
The decline in the production of coal, crude oil, refinery products, and natural gas suppressed the growth rate in September this year. Additionally, the production of fertilizers and cement also remained slow. Fertilizer production was 1.6 percent and cement production was 5.3 percent this month. For comparison, in September 2024, these figures were 1.9 percent and 7.6 percent respectively.
However, steel and electricity production showed year-on-year improvement. In September, steel production increased by 14.1 percent and electricity by 2.1 percent. These figures clearly indicate strength in some industries, but a slowdown in other sectors limited overall growth.
Decline in the First Half of the Current Fiscal Year
In the first half of the current fiscal year (April-September), the growth rate of the eight core industries fell to 2.9 percent. In the corresponding period of the previous year, it was recorded at 4.3 percent. This decline indicates that industrial activities continue to be sluggish and economic recovery is not happening at the anticipated pace.
Impact on the Index of Industrial Production
These eight core industries have a significant impact on the Index of Industrial Production (IIP). Their contribution to the weight of items included in the IIP is 40.27 percent. This means that a slowdown in the core sector directly affects the country's industrial production.
Experts state that the sluggishness in core sector growth could impact the monthly and annual growth rates of the IIP. This is a crucial indicator for the strength of industrial activities and the pace of economic development.
Mixed Impact on Core Sector
According to experts, stability in production and an improvement in demand are essential for enhancing core sector growth. An increase in the production of coal, crude oil, and refinery products could influence core sector growth in the coming months.
The strength of key industries like steel and electricity indicates that production capacity remains robust in some areas. However, sluggish growth in sectors such as fertilizers and cement continues to exert pressure on the overall core sector.
