India’s core sector growth slowed to 2 percent in July, slightly lower than 2.2 percent in the previous month, as energy-related industries faced significant contraction due to seasonal monsoon conditions. The eight key sectors, which account for 40 percent of the Index of Industrial Production (IIP), showed mixed performance, with half of them recording declines.
Coal output dropped sharply by 12.3 percent, marking the steepest fall in five years. Crude oil production fell for the seventh consecutive month, down 1.4 percent, while natural gas production slipped 3.2 percent. Petroleum refining also returned to contraction after two months of growth.
On the other hand, infrastructure-linked industries provided some cushion. Steel registered its fastest growth in nearly two years, jumping 12.8 percent, while cement production rose 11.7 percent to a four-month high. Electricity generation grew marginally by 0.5 percent, moving back into positive territory.
The figures highlight the contrasting trends in India’s industrial landscape, where strong momentum in construction-related output is being offset by persistent weakness in the energy sector.