In March, India's core sector output fell by 0.4%, the lowest level in 19 months, following a 2.8% growth in February. This contraction is indicative of economic challenges as the cumulative growth for the financial year (FY26) dropped to 2.6%, the weakest performance in five years. Notably, four of the eight sectors, including fertilisers, crude oil, coal, and electricity, reported negative growth. The fertiliser sector experienced the sharpest decline, contracting 24.6% due to input shortages linked to the ongoing crisis in West Asia. Crude oil production decreased by 5.7%, contributing to a 2.8% decline for the year. Despite this, steel and cement sectors showed resilience, with steel production rising 2.2% in March and 9.1% for the year, while cement grew 4% in March and 8.6% for FY26. The overall situation suggests a potential moderation in the Index of Industrial Production (IIP) growth, expected to fall to 1-2% in March compared to 5.2% in February, primarily due to rising energy prices and supply constraints.