March Core Sector Data Shows 0.4% Contraction, First Fall in 5 Months

India’s 8 core Infrastructure Sectors recorded a 0.4% fall in March, according to official data cited in a PTI report. This follows a 2.8% increase in February and marks the first decline in 5 months. It is also the weakest performance since August 2024. 

On an annual basis, growth in these sectors eased to 2.6% in 2025-26, compared with 4.5% in the previous year. 

Fertilisers and Fuel Segments Pull Numbers Down 

Fertiliser output fell 24.6% year-on-year in March, the sharpest drop seen in the series so far. The fall comes after a modest rise in February and is indicative of lower availability of key inputs linked to West Asia. 

Coal production declined 4%, reversing growth of 2.3% in the previous month. Crude oil output fell 5.7%, extending a continuing decline in domestic production levels. 

Electricity Generation Slips 

Electricity output contracted 0.5% in March, compared with 2.3% growth in February. The change points to lower demand or seasonal factors affecting consumption. 

Refinery products showed minimal movement, with output rising just 0.07% during the month. 

Growth Slows in Construction-Linked Sectors 

Steel production grew 2.2% in March, slower than 7.6% in February. Cement output rose 4%, down from 8.9%, indicating some moderation in construction activity. 

Natural gas output increased 6.4%, recovering from a contraction in the previous month, supported by higher domestic production. 

Role in Industrial Output 

The core sector contributes about 40% to the Index of Industrial Production, making it an early indicator of industrial trends. In March, 4 of the 8 sectors recorded a decline, affecting the overall reading. 

The data also shows supply-side pressures following developments in West Asia from late February, which affected availability of inputs for some industries. 

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Conclusion 

The March contraction indicates a slowdown in core sector output at the close of the financial year, with declines in key segments offsetting limited gains elsewhere. 

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