India’s core industrial output growth slows to 5.4% in July

India’s core industrial output growth slowed to 5.4 per cent in July 2026 from 6 per cent in June, mainly due to a moderation in iron ore and electricity production, according to data released by the Ministry of Commerce and Industry on Thursday. Despite the slowdown, July recorded the second-highest growth in seven months.
Iron ore production rose 29.5 per cent year-on-year in July, compared with 44.5 per cent growth in June. The sector, which has a 4.9 per cent weight in the Index of Core Industries (ICI), remained a key driver despite the moderation.
Five of the nine core sectors, accounting for nearly 64 per cent of the index, recorded slower growth in July.Electricity generation growth eased to 9 per cent from 11.4 per cent in June, while steel production growth fell to 2.9 per cent, its lowest level in the new series. Fertiliser output contracted 8 per cent, compared with a 3.3 per cent decline in June, while crude oil production fell 5.3 per cent against a 4.2 per cent contraction previously.
Economists attributed the moderation partly to an unfavourable base and lower electricity demand following a decline in temperatures. ICRA Chief Economist Aditi Nayar said the slowdown in iron ore production alone exerted a downward pressure of around 95 basis points on July’s core output growth.However, some sectors provided support. Coal output growth rose to an 11-month high of 7.6 per cent in July from 1.4 per cent in June, while cement production growth increased to a seven-month high of 13.1 per cent. Refinery products also returned to growth, expanding 2.7 per cent after contracting 4 per cent in June.The nine core industries recorded 4.3 per cent growth during April-July 2026, sharply higher than the 1.5 per cent growth recorded in the corresponding period a year earlier.
The latest data is only the second release under the revised ICI series, which has a new base year of 2022-23 and covers nine sectors. The core industries now account for 32.88 per cent of the Index of Industrial Production (IIP), compared with 40.27 per cent under the earlier series.With core sector growth moderating, economists expect IIP growth to ease to around 6 per cent in July from 7.3 per cent in June.

(Business Correspondent)