Core Sector Slowdown Signals Emerging Stress in India’s Industrial Backbone
Dr. Santosh Kumar Mohapatra
India’s core sector appears to be heading toward its weakest performance in the past six years during the financial year 2025–26. The latest data for February 2026 indicates a sharp moderation in output growth to just 2.3%, largely driven by contractions in natural gas and crude oil production, along with a noticeable slowdown in power generation. This trend raises concerns about the momentum of the country’s industrial recovery.
The core sector comprises eight critical industries that serve as the backbone of India’s industrial economy. These include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity. Together, they account for 40.27% of the Index of Industrial Production (IIP), making them a vital barometer of overall economic health.
Given their strong forward and backward linkages with other sectors, any slowdown in core industries has cascading effects across the broader economy. Therefore, the current deceleration is not merely a sectoral issue but a signal that warrants close attention from policymakers, industry stakeholders, and economists alike.
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