Growth of eight core sectors halved to 2.3% in February, before West Asia crisis began

India’s core industrial growth slowed sharply even before the crisis in West Asia began, with government data showing growth in the eight core sectors of the economy slowing to a three-month low of 2.3% in February 2026.

This slowdown in February, as shown by the data on the Index of Eight Core Industries released by the Ministry of Commerce and Industry on Friday, comes at a time when economists and policymakers are expecting a further slowdown in March in response to the supply and export constraints brought on by the war in West Asia. The data also shows that domestic production of oil, gas, and petroleum products had been shrinking for months, which is now compounded by the external supply constraints.

“Even before the start of the West Asia crisis, the growth of the core sector output in India had slowed to a three-month low of 2.3% in February 2026,” Aditi Nayar, Chief Economist at ICRA said. “The sequential halving in year-on-year growth from 4.7% in January 2026 was relatively broad-based, with only two sectors, namely cement and steel eking out a year-on-year rise that was above 3.5%.”

The cement sector grew by 9.3% in February 2026, the best performance out of the eight sectors measured in the index. However, this was a four-month low, with the sector breaking a three-month streak of double-digit growth. 

Iran-Israel war updates on March 20, 2026

The steel sector, too, saw relatively robust growth, but slower than previous months, at a three-month low of 7.2% in February 2026.

Notably, the data shows that the crude oil, LPG and LNG constraints due to the West Asia crisis have come at a particularly bad time for India, with domestic production of these items having contracted for multiple months — a trend that continued into February as well. 

The crude oil sector contracted 5.2% in February 2026, the sixth consecutive month of contraction. The natural gas sector contracted by 5%, continuing a 20-month streak of contraction. 

The refinery products sector contracted 1% in February 2026. The sector faced contraction in six out of the 11 months of this financial year for which there is data. 

Growth in the fertilisers sector slowed to a five-month low of 3.4% in February 2026, although this was on a high base of 10.2% in February last year. Growth in the coal sector slowed to a three-month low of 2.3%, while that in the electricity sector slowed to a three-month low of 0.5%. 

“The longer that the crisis persists, resulting in higher fuel prices and tighter availability, the larger the downside will be for India’s GDP growth in FY2027, notwithstanding the buffers provided by resilient domestic demand,” Ms. Nayar said.