India’s Core Sectors Hit a Fourteen-Month Low
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- Last Updated: 21 Nov 2025 at 1:55 PM IST
India’s eight core sectors delivered no growth at all in October. The index stayed exactly where it was a year ago, halting the steady run seen through the past few months. It is the weakest performance in fourteen months, and the data sets a different tone from the optimism around the festive season.
The slowdown has been building quietly. Growth had already eased to 3.3% in September after a strong August, and the October reading suggests that the broad recovery in industrial activity may be less uniform than earlier assumed.
Why did the core industries lose momentum just when the festive quarter usually lifts activity?
Which Sectors Dragged the Headline Number to Zero?
The largest pressure points came from the energy group in October. Coal production dropped 8.5% after an extended monsoon period, cooler temperatures cut power demand. That decline fed directly into electricity generation, which fell 7.6% and effectively reversed three months of gains.
Natural gas output fell 5%, continuing a long stretch of year-on-year declines. Crude oil production slipped 1.2% and has now contracted in most months this year. These four categories together carried enough weight to pull the overall index down, despite improvements in several construction-linked sectors.
Did Construction and Manufacturing Inputs Offer Any Relief?
They did, but the gains could not counter the drag from energy.
Fertilisers posted the strongest rise at 7.4% in October. It was a clear rebound from recent months. Cement saw a steady 5.3% increase, and steel grew 6.7%, although the growth looks softer compared to September’s unusually strong base. Refinery products rose 4.6%, which was their best performance in nine months.
Interestingly, four out of the eight core industries improved sequentially over September. Yet the contraction in electricity and the weakness in mining were large enough to flatten the composite index.
What Does This Imply for Broader Industrial Growth?
The effects are likely to show up in the Index of Industrial Production. Aditi Nayar of ICRA pointed out that excess rainfall hit mining and lowered power demand, which explains much of the loss in momentum. She expects IIP (Index of Industrial Production) growth for October to settle in the 2.5 to 3.5% range, down from 4% in September.
Manufacturing does not appear to be slowing in the same way. Surveys show that factory activity actually picked up pace in October. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) climbed to 59.2 in October, supported by GST rate changes, better productivity and more technology-led processes. External demand softened, but domestic restocking around the festive season gave firms a lift.
Is the October Print a Temporary Setback or Something Deeper?
The pattern is uneven. Construction-related segments are holding steady, but energy continues to face persistent supply and demand challenges. Some of the weaknesses are seasonal, but part of it reflects structural issues that have lasted through most of this year.
Conclusion
The coming industrial production data should offer clearer signals. The key question now is whether the rebound in manufacturing is strong enough to offset the continued strain in mining and electricity, or whether the core sectors are hinting at a more sustained loss of momentum.
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