Core sector growth slips to 5.4% in July as momentum weakens

India's core sector growth moderated to 5.4 per cent in July, reflecting a loss of momentum across key industrial segments as energy and commodity prices softened. The slowdown underscores emerging headwinds in the manufacturing and energy landscape, even as some sectors managed expansion during the month.

Among the nine core industries tracked by the government, six registered growth in July. However, three critical sectors — natural gas, crude oil and fertilisers — contracted during the period, weighing on overall performance. The pullback in crude oil and natural gas reflects softer global energy prices, while fertiliser weakness points to subdued agricultural demand.

Refinery products provided a bright spot, returning to growth after three consecutive months of contraction. The rebound in refinery output suggests improving operational capacity utilization in the downstream petroleum sector, though gains remain modest amid volatile global crude prices.

The core sector — comprising coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity and automobiles — serves as a critical barometer of industrial health and economic momentum. The deceleration to 5.4 per cent signals caution, particularly as policymakers monitor growth trajectories ahead of the second half of the fiscal year.