Unfavourable base effect, along with a contraction in crude oil and natural gas production sequentially decelerated India's eight major industries' output in July 2018.

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According to the Ministry of Commerce and Industry on Friday, the Index of Eight Core Industries (ECI) showed a rise of 6.6 percent from a growth of 7.6 percent in June.

However, on a year-on-year basis, July's growth was higher than the rise of 2.9 percent reported for the corresponding period of the previous fiscal.

"The combined Index of Eight Core Industries stands at 128.4 in July, 2018, which was 6.6 percent higher as compared to the index of July 2017," the ministry said in a statement.

"Its cumulative growth during April to July, 2018-19 was 5.8 percent."

The ECI index represents major sectors like coal, steel, cement and electricity. It carries 40.27 percent weightage of the Index of Industrial Production (IIP), which is the macro gauge for India's factory output.

On a sector-specific basis, refinery products, which has the highest weightage of 28.03 percent, grew by 12.3 percent in July 2018 compared with the corresponding month of the last fiscal.

Electricity generation, which has the second highest weightage of 19.85, picked up by 4.8 percent.

Steel production, the third most important component with weightage of 17.92, inched up by 6 percent during the month under review, whereas coal mining, with a 10.33 weightage, edged higher by 9.7 percent.

On the other hand, extraction of crude oil, which has an 8.98 weightage, declined by

(-) 5.4 percent during the month under consideration.

The sub-index for natural gas output, with a weightage of 6.88, slipped by (-) 5.2 percent.

Cement production, which has a weightage of 5.37, edged higher by 10.8 percent in July 2018.

Fertiliser manufacturing, which has the least weightage -- only 2.63 -- inched-up by 1.3 percent during the month under review.

"The dip in the core sector growth in July 2018 relative to the previous month was modest albeit broad-based," said Aditi Nayar, Principal economist at ICRA.

"The easing in growth of core sector output and automobile production, as well as an unfavourable base effect, suggest that a moderation in IIP growth in July 2018 relative to June 2018 is on the anvil."