India’s Core Sector Growth Drops to 0.5% in May, Weakest in Seven Months

Data released by the Ministry of Commerce and Industry on Monday showed the Index of Eight Core Industries expanded by just 0.5%, its slowest pace since October 2025.

The May data showed weakness across 5 key infrastructure segments, especially coal, petroleum refinery products, crude oil and natural gas.

The Index of Eight Core Industries tracks coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.

Which Core Industries Contracted in May 2026?

Five of the eight sectors reported a decline in output during May.

The sharpest pressure came from coal and refinery products, while crude oil and natural gas also remained weak.

Which Sectors Supported the Core Sector Index?

Only three sectors recorded growth in May: electricity, cement and steel.

Electricity generation rose strongly due to higher demand from households during extreme heat conditions. Cement output also improved, while steel remained positive despite slower growth.

Why Does the Eight Core Industries Data Matter?

The eight core industries make up about 40% of the Index of Industrial Production.

This makes the core sector data an early indicator of broader industrial activity. A weak reading can signal pressure on manufacturing, construction and energy-linked sectors before the full IIP data is released.

Final Outlook: Will Industrial Growth Recover?

India’s core sector growth remained positive in May, but the 0.5% reading shows that industrial momentum weakened sharply.

Going ahead, the key factors to watch will be coal production, refinery output, energy demand, cement activity and the next IIP release. If weakness in petroleum-linked sectors continues, it could weigh on broader industrial growth.