India's core sector growth experienced a slowdown in February, dropping to a three-month low of 2.3% due to contractions in crude oil, natural gas, and refinery products, raising concerns about overall economic momentum.
Production growth in eight core infrastructure sectors slowed to a three-month low of 2.3 per cent in February due to a contraction in the output of crude oil, natural gas, and refinery products.
According to the government data, these eight sectors expanded by 3.4 per cent in the same month last year.
The growth rate in production of fertiliser, cement and electricity declined to 3.4 per cent, 9.3 per cent and 0.5 per cent, respectively, in February this year.
However, coal and steel production recorded healthy growth.
During April-February, the cumulative production growth in the infrastructure sector was 2.9 per cent compared to 4.4 per cent in the same period of the last financial year.
Commenting on the data, Aditi Nayar, Chief Economist at Icra Ltd, said that even before the start of the West Asia crisis, the growth of the core sector output in India had slowed to a three-month low.
Accordingly, IIP growth appears set to moderate to around 4 per cent in February 2026 from 4.8 per cent in January 2026, she said.
"The longer that the crisis persists, resulting in higher fuel prices and tighter availability, the larger the downside will be for India's GDP growth in FY2027, notwithstanding the buffers provided by resilient domestic demand," she added.