India’s core sector output contracted 1.8 percent in August compared with 6.1 percent in the previous month, according to data released by the government on September 30.

This represents a marked slowdown in growth to 4.6 percent for the first five months of the year at 4.6 percent, from eight percent during similar period in the previous year.

This is likely to have significant bearing on industrial production, especially as manufacturing activity has slowed over the last month.

India’s manufacturing PMI had slumped to a three-month low of 57.5 in August compared with 58.1 in the previous month, as demand had softened.

The combined Index of Eight Core Sector Industries has a 40 percent weight in the Index of Industrial Production and measures the output of key sectors - cement, coal, crude oil, electricity, fertilisers, natural gas, refinery products and steel.