India’s core sector growth shrinks to 0.4% in March, lowest in two years

India’s core industrial activity contracted in March 2026, with the combined Index of Eight Core Industries (ICI) falling 0.4 per cent year-on-year compared to March 2025. This marked the weakest performance in nearly two years.

Amid the ongoing Iran War, the production of Fertilizers, Crude Oil, Coal and Electricity recorded negative growth in March.

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Crude oil production continued its downward trajectory, falling 5.7 per cent in March, and also recorded a cumulative decline of 2.8 per cent in FY26, reflecting persistent challenges in domestic output.

Coal production contracted by 4 per cent year-on-year in March, and on a cumulative basis, the output dipped by 0.5 per cent during April–March FY26 compared to the corresponding period of the previous year.

Electricity generation, with a weight of 19.85 per cent, declined slightly by 0.5 per cent in March.

Natural gas production offered some relief, rising 6.4 per cent in March on a yearly basis while the Petroleum refinery products remained largely flat, registering a marginal growth of 0.1 per cent in March.

Fertilizer production saw a sharp contraction of 24.6 per cent in March, although its cumulative index for the fiscal year showed only a marginal decline of 0.1 per cent.

Steel production grew 2.2 per cent year-on-year in March, and the sector remained a strong contributor through the year, posting a robust cumulative growth of 9.1 per cent in FY26.

Cement output also recorded healthy growth, rising 4.0 per cent in March.