India’s Core Sector Growth Slows to 5.4% in July

India’s eight core industries grew 5.4% YoY in July, slowing from 6% in June. While the headline number shows some moderation, I think the sector-wise numbers give us a better picture of what is actually happening in the economy. Iron ore production recorded the strongest growth at 29.5% YoY, although it slowed from 44.5% in June. Cement production remained strong with 9.9% growth, supported by infrastructure and construction activity. Steel production grew 6.5%, while natural gas output increased 3.7%. On the weaker side, fertiliser production declined 4.3%, mainly due to supply constraints and higher energy costs amid the West Asia situation. Crude oil production contracted 5.3%, while power generation growth was relatively weak at 2.1%. What stands out to me is that infrastructure-linked segments like cement and steel are still showing healthy growth. That is a positive sign because these industries are closely connected with construction and broader economic activity. At the same time, weakness in crude oil, fertilisers and power should not be ignored. In my view, the 5.4% number itself is not worrying, but I would watch whether infrastructure-led demand remains strong over the next few months. That will be more important than reacting to one month of slower headline growth.