Core sector growth slows to 0.5% in May; coal, refinery products down amid crisis
The growth in India’s eight core industrial sectors slowed to 0.5% in May 2026, the second lowest in 21 months, official data showed. The data on the Index of Eight Core Industries released by the Ministry of Commerce and Industry on Monday showed that five out of eight sectors contracted in May.The only month in the past 21 months that saw a slower core sector growth was October 2025, when the index contracted 0.1%.
“Core sector growth in May was disappointing at 0.5% compared with 1.2% last year,” Madan Sabnavis, chief economist at the Bank of Baroda, said. “The lower growth number on a low base can be attributed more to the decline in production from the petroleum-based sector.”
The crude oil sector contracted 4.6% in May, a worse performance than the contraction of 3.9% in April and of 1.8% in May last year. Similarly, the natural gas sector contracted 4.9% in May, its worst performance in three months.
The refinery products sector contracted by 8.7% in May, its worst performance in three-and-half years. According to Rahul Agrawal, principal economist at ICRA, this “partly reflects the fallout of the West Asia crisis”. The coal sector, too, contracted by 9.3% — the worst in 10 months. “Crude oil, natural gas, and refinery products — all registered a decline in production,” Mr. Sabnavis said. “This can be attributed more to the higher import of crude and softening of prices in the international market.”
The fertilizer sector contracted for the third consecutive month in May, by 0.9%. This was, however, a stronger performance than the contraction of 8.6% in April and of 24.6% in March.
The steel, cement, and electricity sectors were the only ones that registered growth in May. Of these, the electricity sector saw growth accelerate to 8.7%, albeit on a low base since the sector contracted by 4.7% in May last year. The steel sector saw growth slowing to a 13-month low of 5%, while the cement sector quickened marginally to a growth of 8.4%.
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