The ICI measures the combined and individual performance of production of eight core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and Electricity. The Eight Core Industries comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).
Core sector output decelerated due to slowdown in five out of nine sectors that account for approximately 64per cent of the index.
Fertilizers, crude oil and natural gas that account for 14 per cent of the core industries’ output, continued to contract, though natural gas contraction was slower than previous month. On the other hand, iron ore, electricity and steel that account for 53.4 per cent of the index recorded slower growth compared to the previous month, Dr. Devendra Pant, Chief Economist, India Ratings and Research, said.
In recent months, iron ore, electricity and cement have been the core industries’ growth drivers. However, iron ore and electricity growth slowed to 29.5 per cent and 9 per cent year on year, respectively in July 2026, he said.
Slowdown in electricity generation was possibly due to reduced demand, following temperature reduction unlike peak summers, Pant said.
India Ratings has been reiterating that supply side issues, ie. reduced gas supply and high energy cost has been adversely impacting fertilizer production, following the West Asia conflict outbreak.
In August 2026, core industries output could further slowdown to under 5 per cent, owing to base effect, he said
