Core Sector Activity Contracts
Context:
According to the latest data released by the Ministry of Commerce and Industry, India's Index of Eight Core Industries contracted by 0.4% in March 2026.
Marking the poorest performance in 19 months, this immediate downturn reflects the severe supply chain shocks following the outbreak of the war in West Asia.
Overall Annual Performance:
For the full financial year 2025-26, the core sector index recorded a sluggish growth rate of just 2.6%.
This represents the lowest annual growth for these foundational industrial sectors since the COVID-19 pandemic shock in 2020-21.
Sectoral Breakdown for March 2026:
Data revealed that four out of the eight core sectors contracted compared to their levels in March of the previous year:
Fertilisers:
Witnessed the most drastic fall, plunging by an unprecedented 24.6% year-on-year.
Economists attribute this crash directly to an acute shortage of raw material inputs caused by the West Asia crisis.
Electricity & Crude Oil:
The electricity sector contracted by 0.5% (weighed down by an adverse base effect), while the crude oil sector contracted by 5.7%.
Over the course of 2025-26, electricity grew just 0.9%, down sharply from 5.2% the previous year.
Steel and Cement:
Both sectors saw significant growth slumps, dropping to an 18-month low (2.2%) and a 17-month low (4%), respectively.
This indicates a broader slowdown in domestic construction activity during the month.
Natural Gas:
The only sector to display relatively robust growth was natural gas, which grew by 6.4%.
This resilience was driven by the government actively pushing oil marketing companies to increase output to counter the global supply constraints brought on by the West Asia conflict
8 Core Industries Compositions: