Iron Ore Fuels July's Core Sector Growth Amid Uneven Recovery

India's Index of Core Industries posted a 5.4% growth in July 2026, driven by strong performances in iron ore, electricity, and cement. Despite a general upward trend, the sector faced setbacks with declines in natural gas, crude oil, and fertiliser outputs, indicating an uneven economic recovery.

The Index of Core Industries (ICI) in India recorded a 5.4% year-on-year growth in July 2026, according to provisional data from the Ministry of Commerce and Industry. This growth, while slightly lower than June's 6%, underscored a robust expansion with April-July cumulative growth hitting 4.3%, much ahead of last year's 1.5% for the same period.

Iron ore emerged as the leading contributor among the eight core sectors with a significant 29.5% year-on-year surge in July. Electricity and cement production also showed impressive gains, increasing by 9% and 13.1% respectively. Other sectors like coal and steel saw moderate growth, while refinery products rose marginally by 2.7%. This performance highlighted sustained momentum in infrastructure, construction, and industrial demand.

Notwithstanding these advances, the recovery's uneven nature was evident as natural gas output decreased by 3.7%, crude oil suffered a 5.3% contraction, and fertiliser production dropped by 8% in July. The June core sector index was revised upwards to 120.7 from an initial 119.6, adjusting the annual growth estimate from 5% to 6%. Continued strong performances in mining, cement, and power are expected to support core sector activity, although challenges remain due to weaknesses in certain energy segments.