Growth in core sectors slows to 5.4% in July 2026

Expansion in core sectors slows to 5.4% in July 2026 The data on the Index of Core Industries issued by the Ministry of Commerce and Industry, nevertheless, demonstrated that July's expansion was still the second fastest in seven months.

Key points

• Economic activity in India's core industrial sectors saw expansion slow to 5.4% in July 2026 from 6% in June, according to official data issued on Thursday (August 20, 2026).
• The iron ore sector saw expansion slowing to 29.5% in July 2026, from 44.5% in June.
• Expansion in the steel sector slowed to 2.9% in July 2026, the lowest in the 14 months for which there is data, down from 5.6% in June.
• This low base effect was additionally apparent in the coal sector's 11-month high expansion rate of 7.6% in July 2026.
• As compared to a contraction of 3.3% in June, within the index, the fertilisers sector contracted 8% in July 2026.

In practice, the data on the Index of Core Industries (ICE) published by the Ministry of Commerce and Industry, even so, indicated that July's expansion was still the second-fastest in seven months. (Representational image) Photo Credit: Getty Images/iStockphoto.

Economic activity in India's core industrial sectors saw expansion slow to 5.4% in July 2026 from 6% in June, according to official data issued on Thursday (August 20, 2026). This was driven by a significant slowdown in the fertilisers, iron ore, and steel sectors, accompanied by a continued contraction in the natural gas and crude oil sectors.

As compared to a contraction of 3.3% in June, within the index, the fertilisers sector contracted 8% in July 2026. The sector had grown 1.9% in July of last year. This performance is probable due to the deficient and patchy ongoing monsoon, and the resultant lower levels of sowing taking place.

Notably, the iron ore sector saw expansion slowing to 29.5% in July 2026, from 44.5% in June. Since the sector contracted 16.4% and 7.1% in June and July of last year, respectively, nevertheless, it is notable to point out that these relatively high expansion levels are on a low base.

This low base effect was additionally apparent in the coal sector's 11-month high expansion rate of 7.6% in July 2026. The sector had contracted 12.3% in July last year.

For context, the natural gas and crude oil sectors continued their long streak of contractions. While the crude oil sector contracted 5.3%, the natural gas sector contracted 3.7% in July 2026. Both sectors have contracted continuously for the last 14 months for which there is data.

Notably, the refinery products sector, nevertheless, snapped a three-month streak of contractions by growing 2.7% in July 2026, the sector's best performance in nine months.

In practice, the two relative bright spots among the core sectors were the cement and electricity sectors. The electricity sector grew 9% in July 2026, albeit slower than the 11.4% seen in June. The cement sector saw expansion hit 13.1% in July 2026, a seven-month high, over a 11.1% expansion in July last year.

Taken together, the developments around growth in core sectors slows to 5.4% in July 2026 point to a situation that is still moving, and the coming days should bring more clarity.