India core sectors grow 1.8% in November; cement, steel lead: What’s driving surge

India’s eight core infrastructure industries recorded a modest rise of 1.8 per cent in November, helped by strong output in cement, steel, fertiliser and coal, even as energy-linked segments such as crude oil, natural gas and electricity stayed under pressure. The data, released by the Ministry of Commerce and Industry on Monday, December 22, offer an early read on industrial momentum ahead of the Index of Industrial Production (IIP) numbers.

The Index of Eight Core Industries (ICI), which carries a weight of 40.27 per cent in the IIP, reflects activity across coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. November’s print shows pockets of strength in construction-linked sectors, while the broader picture remains mixed.

Cement, steel power the upturn

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Cement emerged as the standout performer, with production rising 14.5 per cent year on year in November. On a cumulative basis, steel output has expanded 9.7 per cent so far this financial year, underlining resilience in manufacturing and construction activity.

Fertiliser output increased 5.6 per cent during the month, while coal production rose 2.1 per cent, supporting the overall index.

Energy segments remain weak

Not all sectors shared the gains. Crude oil production contracted 3.2 per cent in November, and natural gas output fell 2.5 per cent compared with the same month last year, continuing a trend of declining domestic energy production.

Petroleum refinery products, the largest component in the core basket, slipped 0.9 per cent in November, though it still managed marginal cumulative growth of 0.2 per cent during April to November.

Electricity generation also declined 2.2 per cent year on year, reflecting softer demand and supply-side constraints in parts of the power sector.

Cumulative picture still mixed

Looking at the broader trend, some segments are yet to regain momentum. Coal’s cumulative index is down 1.4 per cent for April to November, while natural gas has fallen 3.0 per cent over the same period. Crude oil is lower by 1.3 per cent, and electricity by 0.3 per cent.

In contrast, cement, steel and fertilisers continue to show healthy cumulative growth, cushioning the overall index from sharper weakness.

The core sector numbers are closely watched as they feed into the IIP. In October, industrial production growth slowed to 0.4 per cent, a dip the government attributed to fewer working days due to festivals such as Dussehra, Deepawali and Chhath.

September and August had seen stronger prints of around four per cent, after July’s 3.5 per cent, suggesting that momentum has been uneven in recent months. November’s core data indicate that while construction-led demand remains supportive, weakness in energy output could cap a faster recovery in overall industrial activity.

Economists say the pick-up in cement and steel is encouraging for infrastructure and housing, but sustained improvement in crude oil, gas and power generation will be key for a broader industrial revival. With public capex continuing and private investment still cautious, the coming months will test whether the gains in construction-linked sectors can offset lingering softness in energy and refinery segments and lift headline industrial growth meaningfully into the new year.