India Core Sector Output September Update

India’s core sector output growth accelerated to a series high of 7.9% year-on-year in September, up from 5.9% in August and 3.1% in the same period last year. This surge was primarily propelled by robust expansions in coal, electricity, refinery products, and iron ore, alongside a favorable base effect. Marking the fourth print under the updated index series with a revised base year of 2022–23 (replacing 2011–12), the index now includes iron ore, expanding the core basket to nine key industries. Chief Economist at Bank of Baroda, Madan Sabnavis, noted that the strong print reflects sustained public capital expenditure in infrastructure, where heightened road construction outlays bolstered cement demand and railway capital spending drove momentum in iron and steel production. Segment-wise operational trends highlighted significant rebounds across primary industrial inputs. Refinery products registered their highest growth in the new series at 10.3% YoY, up from 5.6% in August, while coal production staged a sharp recovery to 10.7% growth following a 3.8% contraction in the preceding month. Iron ore output surged 18.4% compared to 5.5% in August, electricity generation expanded by a solid 11.4%, and steel production picked up to 4.9%. Cement output recorded strong growth of 9.8%, whereas fertilizer production (-11.7%), natural gas (-4.6%), and crude oil (-1.4%) continued to contract. Representing a 40.27% weight in the Index of Industrial Production (IIP), the core sector's performance led Bank of Baroda to project overall September IIP growth between 7.5–8.5%, while ICRA forecasted industrial growth to settle between 6–7%. COALINDIA