Infrastructure-sector industries grew by 4% year-on-year in January, down from an upwardly revised 4.7% growth in December. Seven of the eight core sectors recorded a deceleration in the growth rate in January compared with the previous month.
According to the official data released on Friday, five of the eight components of the Index of Eight Core Industries (ICI) recorded positive growth in January. The output of electricity, coal, cement, steel and fertilisers marked expansion in December, while natural gas and crude oil contracted. Refinery products growth was flat in January.
Within the sectors, cement grew 10.7%, followed by steel (9.9%), electricity (3.8%), fertilisers (3.7%) and coal (3.1%). The sectors that contracted were crude oil (-5.8%) and natural gas (-5%). Refinery products, electricity, steel and coal have maximum weight in the index. In January 2025, the ICI had expanded by 5.1%.
Madan Sabnavis, Chief Economist at Bank of Baroda, said the growth in steel and cement is reflective of strong investment in the economy in infrastructure led by the central government with states also chipping in. This is also reflective of higher housing activity in the economy which appears to be stable, he said.
Sabnavis cited low international prices, making imports more economical, as reasons behind negative growth in crude oil and natural gas, and flat growth in refinery products.
The cumulative growth rate of ICI during April to January stands at 2.8% (provisional) as compared to 4.5% during the same period of last year.
Aditi Nayar, Chief Economist at ICRA, said the Index of Industrial Production (IIP) growth is likely to slow down in January. She, however, expects the growth in the “non-core” part of the IIP to continue to outperform the core industries output, as was the trend in Q3 FY2026. “ICRA expects IIP growth to ease to 5.5% in January from 7.8% in December, while printing higher than the growth in core output in the month,” Nayar said.
The ICI measures the combined and individual performance of production of eight core industries, which comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).