Page 35 - Policy Economic Report - September 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

Figure 18: Sector-wise Growth Rate of Core Industries – July and August 2026 (P)

Source - Office of Economic Adviser, DPIIT, Ministry of Commerce & Industry

The latest data therefore point to continued strength in India's infrastructure and industrial activity,
particularly in electricity generation and construction-linked sectors such as cement, iron ore and steel.
At the same time, persistent declines in domestic production of crude oil and natural gas, together with
weaker coal and fertiliser output, indicate continuing divergence across the core sectors. The combination
of strong electricity and infrastructure-related activity with weakness in several energy and input-
producing sectors will remain important for assessing the broader industrial growth trajectory.

The August 2026 ICI data indicate that India's core-sector activity remained firmly in expansion territory,
with growth of 4.8% and cumulative growth of 4.3% during April–August. The sustained performance of
electricity, cement, iron ore and steel provides a positive signal for industrial and infrastructure activity,
while contractions in several energy and fertiliser sectors remain areas to monitor. The data are also
consistent with the broader improvement in manufacturing activity reflected in the September PMI,
although the two indicators measure different aspects of economic activity.

6. India’s Sovereign Credit Rating upgraded to 'A-' with Stable Outlook by Japan Credit Rating Agency

The Government of India welcomes the decision of Japan Credit Rating Agency (JCR) to upgrade India’s
Long-Term Foreign Currency and Local Currency Issuer Ratings by one notch from ‘BBB+’ to ‘A-’, while
maintaining the Stable Outlook. JCR has also raised India’s country ceiling by one notch to ‘A’.

The upgrade reflects India’s solid economic growth, the effectiveness of economic policies in
strengthening the foundations for growth, and the improved soundness of the financial system. JCR noted
that the Indian economy has maintained a high growth rate, supported by robust private consumption
and public investment. The latest GDP estimates released by the Ministry of Statistics and Programme
Implementation (MoSPI) indicate that real GDP growth remained strong at 7.8 per cent in FY26. The
growth momentum was sustained in Q1 of FY27, with real GDP growing by 7.8 per cent, despite prevailing

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