India’s core sector growth slows to 2.3% in February as oil, gas drag

The growth of India’s eight core infrastructure sectors slowed to 2.3% in February 2026, weighed down by contraction in crude oil, natural gas and refinery products output, according to official data released on Friday.

The Index of Eight Core Industries (ICI) had expanded by 3.4% in the same month last year.

The eight sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — together account for 40.27% of the Index of Industrial Production (IIP).

As per data released by the Ministry of Commerce and Industry, production of cement, steel, fertilisers, coal and electricity recorded positive growth in February, while the remaining three segments saw a decline.

Production of steel and cement rose sharply by 7.2% and 9.3%, respectively, during the month, indicating sustained construction and infrastructure activity. Fertiliser output also increased 3.4%, while coal production rose 2.3%.

Electricity generation posted a marginal growth of 0.5% during the month.

Crude oil output, on the other hand, contracted 5.2% year-on-year, while natural gas production fell 5.0%.

Petroleum refinery products output also declined 1.0%, weighing on overall core sector growth.

The government also revised the core sector growth for January 2026 upwards to 4.7% (final).

Cumulatively, the ICI grew 2.9% during April-February of the current fiscal year (2025-26), compared to the corresponding period of the previous year.

Aditi Nayar, Chief Economist at Icra Ltd, said that even before the start of the West Asia crisis, the growth of the core sector output in India had slowed to a three-month low.

Accordingly, IIP growth appears set to moderate to around 4% in February 2026 from 4.8% in January 2026, she said.

"The longer that the crisis persists, resulting in higher fuel prices and tighter availability, the larger the downside will be for India's GDP growth in FY2027, notwithstanding the buffers provided by resilient domestic demand," she added.

The data for February 2026 is provisional and will be revised based on updated inputs from source agencies.