Industry Odisha Bureau, Oct 22: Iron ore, electricity and coal led September’s gains across India’s infrastructure industries. Fertilisers, natural gas and crude oil contracted. Economists differ on whether overall industrial output will match the pace.
India’s core infrastructure output grew 7.9% in September, its fastest pace in 30 months. Iron ore, electricity, coal, refining and cement drove the expansion, ministry data showed. Growth accelerated from 5.9% in August. It also compares with 3.1% in September 2025.
The index tracks nine industries that underpin wider industrial activity. They span energy, minerals, construction materials and fertilisers. Their combined performance is closely watched as a lead indicator for industry. Cumulative growth for April–September reached 5.1%, against 2.5% a year earlier.
Iron ore posted the sharpest rise, with output up 18.4% year on year. Electricity generation climbed 11.4%, while coal production expanded 10.7%. Refinery output rose 10.3% and cement production grew 9.8%. Steel recorded a more modest 4.9% increase. Together, these figures point to firm demand from construction and power users.
Madan Sabnavis, chief economist at Bank of Baroda, linked the gains to infrastructure spending. He said government outlays on roads had lifted cement demand. Railway investment, he added, had supported demand for iron and steel.
Sabnavis attributed stronger power demand partly to heatwave conditions. Coal output, he said, benefited from consumption by power plants and steelmakers. He saw higher refinery output as a sign of firmer fuel demand and industrial activity. Exports also lent support, he noted.
Three industries remained in contraction. Fertiliser production fell 11.7%, its seventh straight monthly decline. The drop was slightly narrower than August’s 12.4% fall. Sabnavis said higher fertiliser imports had weighed on domestic output.
Natural gas output declined 4.6%, extending a prolonged downturn. Crude oil production slipped 1.4%, an improvement on August’s 3.6% contraction. The oil complex stayed under pressure as imports dominated, according to Sabnavis. These weaker pockets temper, but do not overturn, the broader improvement.
Industry body ASSOCHAM welcomed the data. Its president, Nirmal K Minda, said it reflected firmer industrial momentum and infrastructure development. He expected the trend to bolster investor confidence and support manufacturing. He also expected it to help create jobs.
Aditi Nayar, chief economist at ICRA, offered a more cautious reading. She said September recorded the fastest growth in the new data series. A favourable base, she noted, aided the improvement on August’s upwardly revised figure.
A base effect arises when weak year-earlier output flatters current growth rates. Nayar called the uptick broad-based, with seven of nine sectors improving on August. Electricity and cement were the exceptions, despite strong annual growth.
The two economists diverge on the Index of Industrial Production. Sabnavis expects September IIP growth of 7.5–8.5%. ICRA projects a slowdown to 6–7%, from 8.0% in August. Nayar said a high base would weigh on non-core industries during the month. The core industries make up only part of the broader index.
Official IIP data for September is due on 28 October. That release will show whether core strength has carried into wider industrial output. Until then, the forecasts remain estimates rather than confirmed outcomes.
