NEW DELHI — Growth in India’s eight core infrastructure sectors decelerated to 2.3% in February 2026, down from 3.4% in the same month last year. Data released by the Ministry of Commerce and Industry on March 20, 2026, highlights a significant drag caused by a slump in the domestic energy and hydrocarbon segments.
The Energy Drag
The slowdown was primarily driven by negative growth in three critical segments:
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Crude Oil: Production continued its downward trajectory, reflecting aging wells and a lack of major new discoveries.
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Natural Gas: Output declined, impacting the fertilizer and power sectors.
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Refinery Products: Production saw a contraction, partly due to scheduled maintenance shutdowns at several public sector refineries.
Cumulative Performance (April–February)
The fiscal year-to-date figures show a broader cooling trend in industrial activity:
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Current FY Growth: 2.9%
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Previous FY Growth: 4.4%
Sectoral Highlights
While energy faltered, other sectors provided a partial cushion to the Index of Eight Core Industries (ICI):
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Coal & Steel: Maintained moderate positive growth, supported by steady demand from the power and construction sectors.
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Electricity: Generation remained stable but failed to offset the sharp declines in the petroleum sector.
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Cement: Saw a slight uptick, linked to the government’s push for pre-monsoon infrastructure completion.
Economic Outlook
Economists suggest that the sub-3% growth reflects a “wait-and-watch” approach by private players ahead of the upcoming 2026-27 Union Budget revisions. The cooling core sector growth typically serves as a leading indicator for the Index of Industrial Production (IIP), suggesting that overall industrial growth for February may remain subdued.
