India’s core sector growth edges up to 1.7% in April on steel, cement boost

New Delhi: India’s core infrastructure sector growth rose 1.7% year-on-year in April, up from 1.2% in March, driven by strong output in steel, cement and electricity, even as five of the eight core industries remained in contraction.

The index of eight core industries, which tracks coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity, accounts for 40.27% of the Index of Industrial Production (IIP), a broader measure of factory output in the economy.

According to provisional data released by the commerce and industry ministry on Tuesday, output in several energy-linked sectors remained weak in April. Coal production contracted 8.7% year-on-year, while crude oil output declined 3.9% and natural gas production fell 4.3%. Petroleum refinery products also slipped 0.5% during the month.

The fertiliser sector remained under stress, with output declining 8.6% year-on-year in April, although the contraction was significantly lower than the steep 24.6% fall recorded in March.

Rising output

Steel production rose 6.2% year-on-year in April, cement output increased 9.4%, while electricity generation expanded 4.1%, supporting the overall index growth.

“The year-on-year growth in core sector output inched up to 1.7% in April 2026 from the upwardly revised 1.2% in March 2026, while remaining quite subdued despite a favourable base,” said Rahul Agrawal, senior economist, Icra Ltd.

“The uptick in growth in April relative to March was largely driven by electricity generation and cement, as well as a narrower drag from fertilisers," he added.

Agrawal added that five of the eight sectors registered a contraction in output in April, barring steel, cement and electricity generation, suggesting that economic activity in some sectors was impacted by the West Asia crisis. He said this was likely to be reflected in subdued industrial production growth for April.

Madan Sabnavis, chief economist of Bank of Baroda, said the April core sector data showed the first impact of the Gulf crisis on the real economy, with oil-linked sectors coming under pressure. However, he noted that cement and steel output continued to remain strong due to sustained infrastructure activity led by both the private sector and the government.

Sabnavis said that higher electricity generation was driven by increased power demand during the heatwave, while fertiliser production was affected by gas supply disruptions. He expects IIP growth for April to remain subdued at 2-3%.

For the full financial year 2025-26, the cumulative growth of the eight core industries stood at 2.7%, reflecting moderate expansion amid uneven sectoral performance.