Core Industries Grow 3% in September; Steel, Cement Drive Momentum

New Delhi, Oct 21: India’s core industrial sectors posted a moderate 3.0 per cent year-on-year growth in September 2025, buoyed by robust expansion in steel and cement production, according to data released by the Ministry of Commerce and Industry on Tuesday. The performance indicates sustained industrial activity despite weaknesses in energy-related sectors.

The Index of Eight Core Industries (ICI), a crucial barometer of the industrial economy, measures output across eight key sectors — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity — which together constitute 40.27 per cent of the overall Index of Industrial Production (IIP).

Among the sectors, steel recorded the highest growth in September, surging 14.1 per cent compared to the same month last year. This strong performance reflects continued demand from the construction, automotive, and infrastructure industries, which have been supported by public capital expenditure and steady private investment.

The cement sector followed with a 5.3 per cent increase in output, aided by ongoing infrastructure projects and housing demand in both rural and urban areas. The electricity sector also grew 2.1 per cent, reflecting stable power consumption, while fertilizer production rose 1.6 per cent, ensuring adequate supply ahead of the rabi cropping season.

However, several key energy sectors contracted, weighing on the overall growth momentum. Coal production declined 1.2 per cent, primarily due to lower offtake and supply disruptions in certain mining regions. Crude oil output fell 1.3 per cent, continuing its downward trend as aging fields and technical challenges limit productivity. Natural gas production dropped 3.8 per cent, while petroleum refinery products saw a 3.7 per cent fall amid maintenance shutdowns and fluctuating export demand.

The cumulative growth for the April–September period of the 2025–26 fiscal year stood at 2.9 per cent (provisional), indicating steady yet cautious industrial progress compared to the same period last year. For August 2025, the final growth rate of the ICI was revised upward to 6.5 per cent, highlighting strong momentum in the preceding month.

The Ministry noted that the data for September 2025 is provisional and subject to revision as inputs are updated from respective source agencies, including the Central Electricity Authority, Indian Bureau of Mines, and the Department of Fertilizers.

In line with evolving industrial trends, the ICI now incorporates modern production categories. Since April 2014, electricity data has included renewable energy sources such as solar, wind, and hydroelectric power, reflecting India’s shift toward greener energy generation. Additionally, a new steel product — Hot Rolled Pickled and Oiled (HRPO) — has been included under the Cold Rolled category since March 2019, offering a more comprehensive view of industrial output.

Economists said the September figures indicate a mixed industrial outlook. While the momentum in construction-linked sectors remains encouraging, the contraction in energy segments could limit broader industrial recovery. They added that policy support for mining, oil exploration, and energy transition will be key to sustaining balanced growth across core industries in the coming quarters.