Core sector growth slows to 0.5% in May 2026, second-slowest in 21 months

Growth in activity in India’s eight core industrial sectors slowed to 0.5% in May 2026, the second-lowest in 21 months, official data showed. 

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The data on the Index of Eight Core Industries released by the Ministry of Commerce and Industry on Monday (June 22, 2026) showed that five out of eight sectors contracted in May 2026. Apart from electricity, the sectors that saw growth also slowed from previous months. 

The only month in the last 21 months to have registered 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 2026, its worst performance in four months. 

The refinery products sector contracted by 8.7% in May, its worst performance in 3.5 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 decline in production,” Mr. Sabnavis said. “This can be attributed more to higher import of crude and softening of prices in the international market. 

“In the case of natural gas, with supply chains being addressed, domestic production tended to fall,” he added. “Lower exports of petro products also contributed to decline in production.”

The fertiliser sector contracted for the third consecutive month in May 2026, 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 2026. Of these, the electricity sector saw growth accelerate to 8.7%, albeit on a low base since the sector had contracted by 4.7% in May last year. 

The steel sector saw growth slowing to a 16-month low of 5% in May 2026, while the cement sector slowed to a growth of 8.4% from 9.4% in April.