India’s core sector output grows 4.8% in August, led by cement and electricity

India’s core infrastructure output grew 4.8% year-on-year in August, slightly slowing from 5% growth in July, according to government data released on Monday. The latest reading is the third under the revised Index of Core Industries (ICI) series, which uses 2022-23 as the base year. 

The revised series, introduced in June, replaced the earlier 2011-12 base year and expanded the core sector basket to nine industries from eight with the inclusion of iron ore. 

The output expanded by 6.2% in the same month last year and by 5% in July this year.

During April-August, the pace of growth was higher at 4.3% compared to 2.4% in the same period of 2025-26.

Cement, electricity drive growth 

Cement production rose 12.5% year-on-year in August while electricity generation increased 11.6%. Iron ore output grew 5.5%, followed by steel at 3.4% and refinery products at 2.6%. 

On the other hand, coal, natural gas, crude oil, and fertiliser production contracted during the month. Iron ore, electricity, and cement have emerged as the key drivers of overall core sector growth in recent months, according to the data. 

Core sector growth at 4.3% in April-August 

The ICI recorded cumulative growth of 4.3% during April-August 2026, compared with 2.4% in the corresponding period a year earlier. 

The nine core industries together account for a significant share of India's industrial output and are closely watched as an indicator of broader economic activity. The August data showed that growth remained broad-based across some of the major infrastructure-linked sectors, even as output contracted in four industries.

Rahul Agrawal, Principal Economist, ICRA Ltd, said: "The year-on-year (YoY) growth in core output eased marginally to 4.8% in August 2026 from the downward revised 5.0% in July 2026, partly on account of an unfavourable base."

According Agrawal, the deceleration was broad based, with six of the nine sectors reporting a deterioration in their performance between these months. Among the mining-related segments, coal and iron ore saw a material deterioration in their performance in August 2026 relative to July 2026, largely owing to an adverse base; these two together pulled down the headline core output growth by as much as 130 bps between these months.

"Fertiliser output contracted for the sixth consecutive month in August 2026, following the onset of the West Asia crisis, with the pace of the same widening to double digits in the month. Among the construction-related sectors, while steel output growth inched up slightly in August 2026, it remained lacklustre at just 3.4%. However, cement output expanded by double digits for the second straight month in August 2026. Besides, electricity generation surged by 11.6% in August 2026, amid healthy growth in demand, supporting the overall growth in core output in the month. Excluding this, core output rose by just ~1.6% in the month (vs. +3.4% in July 2026). Given these trends, we expect the IIP growth to ease to ~5.0-6.0% in August 2026 from 6.7% in July 2026," he said.