The infrastructure sectors’ growth remained flat in October as four of the eight components of the Index of Eight Core Industries (ICI) contracted during the month. It was the most dismal performance of the index in 14 months.
The output of coal, crude oil, natural gas and refinery products fell while expansion in production was seen in fertilizers, steel, cement and electricity. For September, the growth in ICI has been revised to 3.3% from 3.0% reported earlier. In October of 2024 the ICI had expanded 3.8%.
Growth driving sectors
Within the sectors, fertiliser sector saw maximum growth of 7.4% followed by steel at 6.7%, cement 5.3% and refinery products 4.6%. The sectors that contracted were coal (-8.5%), electricity (-7.6%), natural gas (-5%) and crude oil (-1.2%).
Refinery products, electricity, steel and coal have maximum weight in the index. While refinery products expanded, electricity and coal contracted.
What did Aditi Nayar say?
Excess rainfall impacted mining activity and power demand in October. “The growth in steel output decelerated sharply to a six-month low of 6.7% from double-digits in the previous month, albeit partly on account of an adverse base, with an early onset of the festive season in 2025,” Chief Economist at ICRA Aditi Nayar said.
The cumulative growth rate of ICI during April to October, 2025-26 is 2.5 per cent (provisional) as compared to the corresponding period of last year. Last year during the same period the growth in April-October stood at 4.3%.
The eight core industries comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP). Slower growth will impact IIP numbers too.
“Given the deterioration in the performance of the mining and electricity segments, ICRA expects the IIP growth to ease somewhat to 2.5-3.5% in October 2025 from 4.0% in September 2025, even as the growth in manufacturing is likely to remain healthy aided by higher demand during the festive season on account of the GST rate rationalisation and the ensuing restocking,” Nayar said.
