India Core Sector Growth Slows to 5.4% in July

India’s eight core industries recorded a moderated growth of 5.4% year-on-year in July, according to data released by the Ministry of Commerce and Industry. This figure represents a slowdown from the 6% growth experienced in June, which itself was an upward revision from an initial 5%.

Key Sector Dynamics in July

Despite the overall moderation, growth remained broad-based across these vital industries. However, individual sectors showed a diverse range of performance, with some accelerating significantly while others faced contraction.

• Cement production expanded by 13.1% year-on-year in July, an increase from 9.9% in June.
• Coal output rose significantly by 7.6%, up from 1.4% in the previous month.
• Iron ore production surged by 29.5% in July, though this marked a decrease from June’s 44.5%.
• Petroleum refinery products output increased by 2.7%, recovering from a 4% degrowth in June.

Conversely, several critical sectors experienced a decline in output during the same period. This downturn in specific areas contributed to the overall moderation in core sector growth.

• Electricity output decreased to 9% in July from 11.4% in June.
• Fertilizer output recorded an 8% degrowth, worsening from a 3.3% degrowth in June.
• Steel output grew at a more modest 2.9%, down from 5.6% in the prior month.
• Natural gas production saw a degrowth of 3.7%, an improvement from its 4.8% degrowth in June.
• Crude oil output declined by 5.3%, a further drop from the 4.2% degrowth recorded in June.

Cumulative Trends and Data Revisions

Looking at the broader picture, the eight core industries collectively grew by 4.3% during the April-July period. This represents a significant improvement compared to the 1.5% growth observed in the same period last year, indicating an early financial year momentum.

The Ministry of Statistics and Programme Implementation (MoSPI) has also revised the base year for the Index of Industrial Production (IIP) from 2011–12 to 2022–23. The current data set for July is the third released under this new base year.