India’s Core Sector Growth Slows to 4% in January 2026 & Steel and Cement Shine

India’s eight core industries recorded a 4% growth in January 2026, down from a revised 4.7% in December 2025, according to data released under the Index of Core Industries (ICI) by the Commerce and Industry Ministry. The slowdown was broad-based, with most sectors showing sequential moderation. However, steel and cement remained bright spots, supported by sustained construction and infrastructure activity.

Sector-wise Performance in January 2026 Index of Core Industries

Strong Performers

• Cement: +10.7% (double-digit growth continues)
• Steel: +9.9%
• Electricity: +3.8%
• Fertilisers: +3.7%
• Coal: +3.1%

Underperformers

• Crude Oil: -5.8% (fifth consecutive month of contraction)
• Natural Gas: -5% (19th straight month in negative territory)
• Except refinery products, all sectors showed some deceleration compared to December.

What Is the Index of Core Industries (ICI)?

The Index of Core Industries (ICI) measures the output of eight key infrastructure sectors,

1. Coal
2. Crude Oil
3. Natural Gas
4. Refinery Products
5. Fertilisers
6. Steel
7. Cement
8. Electricity

These sectors together account for 40.27% weight in the Index of Industrial Production (IIP), making them crucial indicators of industrial momentum.

Industrial Output Still Strong

• Despite moderation in core sector growth, India’s overall industrial output (IIP) grew at a 26-month high of 7.8% year-on-year, supported by strong manufacturing, mining, and electricity output.
• For the first ten months of FY26 (April–January), core sectors grew 2.8%, compared to 4.5% during the same period last year.

Why Are Steel and Cement Growing Strongly?

Economists link the robust growth in steel and cement to,

• Increased infrastructure spending by the central government
• Higher participation by states in capital expenditure
• Stable housing and real estate demand
• Continued momentum in construction projects

ICRA Chief Economist Aditi Nayar termed it a sign of robust construction activity, even as other sectors show moderation.

Question

Q. Which two sectors recorded strong double-digit growth in January 2026?

A) Coal and Fertilisers
B) Steel and Cement
C) Crude Oil and Gas
D) Electricity and Refinery