Eight Core Industries of India

Crude oil, refinery products slows down core sector growth to 2.1% YoY in February.

Published monthly by the Ministry of Commerce and Industry. Updated till February 2019(Published on April 1st, 2019).
Note: The YoY%, 3m average and MoM% series have been calculated over the seasonally-adjusted series.

Recent Data Trend

India's eight core industries' output grew marginally by 2.1% YoY in February 2019 compared to the previous month's growth rate of 1.8% YoY. Even though the growth rate is better than the last month, it is still disappointing given a slower expansion in different segments of the core sector. The sluggish growth in core sector output is largely on account of contraction in production of crude oil and refinery products.

Crude oil production continues to decline for the seventh fiscal year in a row. It reached an all-time low of (-) 6.1% YoY in February in 2019. The declining trend is mainly due to the aging of nearly all oil fields leading to lower production and thus increasing India's dependence on oil imports. Refinery products contracted by 0.8% YoY in February. The ongoing contraction in refinery products for the third consecutive month will also have a bearing on India's exports of petroleum refinery.

The cement and steel industry, both witnessed a fall in their growth rate to 4.9% YoY and 8.0% YoY in February, as against 8.2% YoY and 11% YoY in the previous month, respectively. Subdued demand from user industries such as automobiles and real estate sector can be attributed for a fall in steel production. The Cement industry has registered double-digit growth rate this entire fiscal year largely driven by sustained government-led spending in the construction sector. However, this demand momentum seems to be coming off given the upcoming general election.

Economic growth is being fairly weak, as reflected by the IIP data for January as well as February's core sector performance. This makes a strong case for a rate cut in upcoming RBI policy meet in April 2019.

Brief Overview of Eight Core Industries of India

The data on production of eight core industries of India is published monthly by the Ministry of Commerce and Industry. The current base year for the index of the series is 2011-12=100. The eight core industries included are- Coal, Crude oil, Natural Gas, Petroleum refinery products, Fertilizer, Cement, Steel, and Electricity generation. These eight industries comprise 40.27% of the weight of the items included in the Index of Industrial Production. For more information, please visit the official government website.

Next Release Date: April 30th, 2019

Production of Eight Core Industries-Quarterly

Note: The QoQ% has been estimated onn the seasonally-adjusted series.

Production of Eight Core Industries-Annual

Note: The data in the above graph is of the base year 2004-05=100 and has been discontinued since March 2017.