Core Sector Growth Slows To 2.3% In February 2026 Amid Weak Output

India’s eight core industries recorded a growth of 2.3% in February 2026, according to provisional government data. This marks a slowdown compared to January, where growth stood at 4% (revised to 4.7%).

The moderation reflects weaker output across key sectors, particularly electricity and refinery products. The Index of Eight Core Industries (ICI) is a key indicator of industrial activity and infrastructure demand.

Sector-Wise Performance Overview

The slowdown in February was driven by mixed performance across core sectors, with overall growth moderating from the previous month. Electricity generation decelerated sharply to 0.5% from 5.2%, while refinery products contracted by 1% after remaining flat in January.

Coal growth eased to 2.3%, and crude oil and natural gas continued to decline at -5.2% and -5%, respectively. These trends indicate a broad-based moderation in energy-related sectors, which are key drivers of industrial output.

Positive Contributions from Select Sectors

Despite the overall slowdown, steel, cement and fertiliser sectors continued to record positive growth. Steel output rose 7.2% compared with 11.5% in January, while cement grew 9.3% against 11.3%.

Fertiliser production increased by 3.4%, slightly lower than 3.7% in the previous month. These sectors supported core sector growth, but slower momentum limited overall expansion.

Role of Core Industries in Industrial Output

The eight core industries form a significant component of India’s industrial framework. They collectively account for 40.27% of the weight in the Index of Industrial Production (IIP).

As such, their performance has a direct impact on broader industrial growth trends. Given their weight, any slowdown in these sectors can influence overall industrial activity.

Trends and Underlying Factors

The slowdown in February reflects sector-specific challenges and base effects. Energy-related sectors, including electricity and refinery products, showed weaker performance. Declines in crude oil and natural gas production also continued, indicating persistent supply-side constraints.

At the same time, sectors such as steel and cement maintained growth, supported by ongoing construction and infrastructure activity. However, the moderation in growth rates across most sectors suggests a loss of momentum compared to the previous month.

Read More: India's semiconductor market to reach $300 billion by 2035.

Conclusion

India’s core sector growth slowed to 2.3% in February 2026, down from 4.7% in January (revised). The moderation was driven by weaker performance in electricity, refinery products, and continued contraction in crude oil and natural gas output.

While steel, cement, and fertilisers recorded growth, their slower expansion limited overall gains. As core industries account for over 40% of IIP, their performance remains a key indicator of industrial activity.

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