India core output grew 7.9% year on year in September 2026, accelerating from 5.9% in August as coal production rebounded and refinery products and iron ore expanded faster. The figures released on October 21 marked the strongest growth in the revised index, although September was only its fourth monthly reading.
Key Takeaways
- September growth reached 7.9%, compared with 5.9% in August and 3.1% a year earlier.
- Coal returned to growth, while refinery products and iron ore recorded sharp accelerations.
- The revised index covers nine industries, but fertilisers, natural gas and crude oil remained in contraction.
Table of Contents
- India core output reaches a high in the revised series
- Coal rebounds while refinery and iron ore growth accelerates
- Industrial production forecasts remain divided
- Conclusion
India core output reaches a high in the revised series
The September reading extended the improvement in infrastructure-related production, helped by a favourable comparison with the previous year. Growth in September 2025 had been 3.1%.
The revised index uses 2022–23 as its base year, replacing 2011–12, and adds iron ore to bring the number of core industries to nine. The series-high description therefore applies to the new framework, not an unrestricted historical record.
Aditi Nayar, chief economist at ICRA, said a favourable base supported the acceleration. Madan Sabnavis, chief economist at Bank of Baroda, linked the strength in infrastructure industries to government spending, including road expenditure supporting cement demand and railway outlays supporting iron and steel.
| Item | Details |
|---|---|
| Electricity | September growth: 11.4% year on year; August: 13.1%. |
| Steel | September growth: 4.9%; August: 3.5%. September was the fastest pace in three months. |
| Cement | September growth: 9.8%; August: 11.7%. |
| Fertilisers | September output fell 11.7%; August output fell 12.4%. |
| Natural gas | September output fell 4.6% year on year. |
| Crude oil | September output fell 1.4% year on year. |
Coal rebounds while refinery and iron ore growth accelerates
Coal production increased 10.7% from a year earlier after falling 3.8% in August. Nayar said the improvement benefited from a low base, but also pointed to a strong sequential increase amid low coal stocks at power plants.
Refinery products grew 10.3%, up from 5.6% in August and the strongest reading in the new series. Sabnavis said increased fuel demand and exports supported production. Iron ore output rose 18.4%, compared with 5.5% in August.
The improvement was not uniform. Electricity and cement production continued to grow strongly but slowed from August, while steel accelerated. Fertilisers, natural gas and crude oil remained below their year-earlier levels.
Industrial production forecasts remain divided
The Indian Economic Service's explanation of the core industries index describes a production-volume measure intended to provide an advance indication of broader industrial activity. That reference covers the older eight-industry framework, rather than the revised nine-industry series.
Bank of Baroda projects September Index of Industrial Production growth of 7.5–8.5%. ICRA expects a lower 6–7%, down from 8% in August, because an elevated comparison base could weigh on industries outside the core group.
Those estimates are forecasts, not released September IIP results. The stronger core reading alone does not establish how the rest of industrial production performed.
Conclusion
September's acceleration combined stronger coal, refinery and iron ore production with a favourable base effect. The next release to watch is September IIP, which will show whether the improvement extended beyond the core industries.
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