India’s Infrastructure Output Grows 2.9% in H1 FY26; September Sees 3% Uptick

Image Source: The Economic Times

India’s infrastructure output rose 2.9% year-on-year during April–September 2025, driven by coal, cement, and steel production. September alone saw a 3% increase, signaling steady recovery amid global headwinds. The data reflects moderate industrial momentum ahead of Samvat 2082, with policy support and festive demand expected to boost core sector performance.

India’s eight core infrastructure sectors posted a 2.9% year-on-year growth during the April–September 2025 period, according to data released by the Office of the Economic Adviser. The latest figures show a 3% rise in September alone, indicating a gradual recovery in industrial activity despite global volatility and uneven monsoon impact.

The core sectors—coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity—collectively account for 40.27% of the Index of Industrial Production (IIP). Their performance is a key indicator of India’s economic health and industrial momentum.

Major Takeaways:

H1 FY26 Performance: Infrastructure output grew 2.9% Y/Y in the first half of FY26, compared to 4.6% growth in the same period last year.

September Snapshot: The month of September saw a 3% Y/Y increase, supported by coal and cement production, while crude oil and fertilizers remained subdued.

Sectoral Trends:

Coal output rose 3.5%
Cement grew 6.7%, though slower than last year
Steel posted a modest 3% gain
Electricity generation increased by 1%
Refinery products and fertilizers saw declines of 4.5% and 4.2%, respectively.

Global Context: The slowdown in crude oil and refinery output reflects global demand softness and price volatility, while domestic coal and cement demand benefited from pre-Diwali construction activity.

Notable Updates:

Policy Outlook: Analysts expect infrastructure-linked capex to accelerate in Q3 and Q4 FY26, especially with festive consumption and government spending under Samvat 2082.
IIP Implications: The moderate core sector growth may lead to stable IIP figures, supporting RBI’s cautious stance on inflation and rate policy.
Investment Signals: Sectors like cement, steel, and power remain attractive for long-term investors, especially with upcoming infra projects and housing demand.

India’s infrastructure output shows resilience amid mixed sectoral performance, setting the stage for stronger industrial growth in the second half of FY26.

Sources: 1. Moneycontrol – Infrastructure Output Data 2. Trading Economics – Sectoral Breakdown 3. The Hindu – August Core Sector Growth

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