India's core industries growth accelerates to 7.9% in September as coal rebounds
Key Facts
Growth in India's Index of Core Industries accelerated to 7.9% year-on-year in September 2026, according to a preliminary estimate released by the Ministry of Commerce and Industry, as output expanded in energy and construction materials. The reading exceeded August's final growth rate of 5.9%, after the ministry raised its previous estimate for that month from 4.8%. September growth also surpassed the 3.1% rate recorded in the corresponding month of 2025, according to the official historical table for the new series. Preliminary cumulative growth in core industries stood at 5.1% over April to September 2026. That compared with growth of 2.5% in the corresponding period a year earlier, extending the improvement to cumulative performance alongside the acceleration in annual growth in the latest month.
In energy, coal production rose 10.7% year-on-year in September, according to the sectoral annex to the Ministry of Commerce and Industry's statement. The increase followed a 3.8% decline in output in August, according to Investing.com, marking a shift from contraction to expansion. Electricity generation rose 11.4% in September, although growth slowed from August's revised reading of 13.1% reported by the website. Refinery products output posted annual growth of 10.3%, according to the government statement, while crude oil extraction declined. Crude output fell 1.4%, while natural gas production contracted 4.6%, leaving energy sectors on divergent production paths during the same month.
Iron ore posted annual growth of 18.4% in September, the highest rate among the sectors in the index breakdown, according to the Ministry of Commerce and Industry. Cement production rose 9.8%, outpacing overall core industries growth during the month. Steel output increased 4.9% year-on-year, more slowly than cement and iron ore. Fertilizer production, meanwhile, contracted 11.7%, a steeper decline than those in natural gas and crude oil. Expansion in iron ore, steel and cement output thus coincided with weakness in fertilizers, reflecting uneven sectoral performance despite the acceleration in the overall index.
The readings form part of a new Index of Core Industries series using the base year 2022-23, according to the Ministry of Commerce and Industry's statement on the index update. The ministry added iron ore to the industries covered by the series, bringing the activity into its scope alongside steelmaking. It also changed the measurement of steel output to use gross production instead of net production, in line with the Index of Industrial Production. For coal, the ministry said in its statement: "Only raw coal has been retained in the new Index of Core Industries series." The methodology excludes middlings and washed coal to prevent double counting, as part of changes to coverage and the calculation of output.
Against the broader industrial backdrop, India's Index of Industrial Production recorded annual growth of 8.0% in August 2026, according to the Ministry of Statistics and Programme Implementation. Manufacturing supported that performance with growth of 9.0%, outpacing the broader index's increase in the same month. The ministry said manufacturing growth had reached "8% or more in the last three consecutive months" through August. In September, the preliminary manufacturing Purchasing Managers' Index rose to 55.7, according to a Reuters report published by Investing.com. That compared with a reading of 52.8 in August, adding an increase in the industrial activity gauge to the improvement recorded in government production data.
On monetary policy, the Reserve Bank of India raised its repo rate by 25 basis points to 5.5% at its October meeting, according to Reuters. In morning trading on 22 October 2026, the Nifty index fell 0.87% to 22,618.50 points, according to Investing.com. The website linked the weakness in equities to higher oil prices and a weaker rupee. The Ministry of Statistics and Programme Implementation is scheduled to release September's Index of Industrial Production on Wednesday, 28 October 2026. That will be followed by the release of October's Index of Core Industries on Friday, 20 November 2026, according to the date set by the Ministry of Commerce and Industry.