Analyse the recent trends in core sector growth in India (2025-26) and their implications for the manufacturing and infrastructure sectors.

The Index of Core Industries (ICI), compiled by the Office of the Economic Adviser, DPIIT, now covers nine infrastructure industries and carries a combined weight of 32.88% in the IIP [2], making it India's earliest monthly read on industrial momentum. Recent data show a recovery that is firm in aggregate but sharply uneven across sectors.

Trend 1: Moderating headline growth on a strengthening base

• ICI grew 5.4% (provisional) in July 2026, easing from 6.0% (final) in June 2026 [1].
• June's figure was itself revised upward from a provisional 5.0% [1] — a caution against reading single months as turning points.
• Cumulative April–July growth stood at 4.3%, against 1.5% in the corresponding period a year earlier [1], indicating a genuinely stronger year rather than a slowdown.

Trend 2: Divergence between construction-linked and energy sectors

• Iron ore led with about 29.5% growth, with cement and electricity also expanding, while crude oil, natural gas, refinery products and fertilizers contracted [1].
• Growth is therefore construction- and power-led, not broad-based.

Trend 3: A changed measurement lens

• From July 2026 the ICI shifted to base year 2022-23, adding iron ore as the ninth core industry and making electricity the largest-weight sector [2][3], replacing the 2011-12 series used until May 2026 [4]. Inter-temporal comparison must account for this break.

Implications

• Manufacturing: buoyant steel, cement and iron ore output signals healthy downstream and capital-goods demand; but since core industries drive nearly a third of the IIP [2], any core moderation caps overall factory-output growth, while weak refinery and fertilizer output raises input-cost and import-dependence risks.
• Infrastructure: rising electricity and cement output reflects sustained public capital expenditure, though sluggish hydrocarbons expose the energy-security gap underpinning infrastructure expansion.

In sum, India's core sector is expanding on a stronger base, but the gains rest on a narrow construction-energy axis. Sustaining momentum requires diversifying growth into hydrocarbons and fertilizers, strengthening domestic energy security, and using the revised, better-representative ICI series for sharper, evidence-based industrial policy.