India's core sector output experienced a growth of 3.7% in December 2025, marking the fastest pace in four months. This is a notable acceleration from the 2.1% expansion recorded in November 2025. The growth was primarily propelled by significant increases in the production of cement and steel. The eight core industries, which include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity, collectively account for 40.27% of the weight in the Index of Industrial Production (IIP). Therefore, the performance of these sectors is a key indicator of broader industrial momentum in the country.
In December 2025, cement production surged by 13.5%, demonstrating strong demand in the construction and infrastructure sectors. Steel output also saw a substantial increase of 6.9%. Electricity generation experienced a recovery, with a growth of 5.3%. This growth reflects steady demand from industrial and commercial users. Coal and fertilizers also contributed to the overall expansion, with output rising by 3.6% and 4.1%, respectively.
However, not all sectors within the core industries experienced growth. The energy sector faced challenges, with crude oil production declining by 5.6% and natural gas output falling by 4.4%. Refinery products also saw a decrease of 1%. These contractions in oil and gas-linked segments have been a persistent concern. The government is trying to scale up the share of clean energy and new-age fuels like green hydrogen and nuclear.
Cumulatively, the core sector output grew by 2.6% during April–December 2025-26, compared to the corresponding period last year. This indicates continued pressure from the weak performance in the oil and gas sectors. The growth of cement and steel has maintained strong momentum during this period, with 9.5% and 8.8% growth, respectively.
The central government has been scaling up its capital expenditure in the past few years in order to stimulate economic growth and to crowd in private investments. As per the first advance estimate of gross domestic product (GDP) for the current financial year, construction sector output in real terms is expected grow 7% in the current financial year, though slightly at a moderated pace compared to 9.4% in FY25.
