Revised Index of Core Industries (ICI) – Iron Ore Inclusion and India’s Statistical Overhaul

Index of Core Industries (ICI) Latest News

• The Office of Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT) has released the revised Index of Core Industries (ICI) with 2022–23 as the new base year, replacing 2011–12. 
• The revised index recorded 5% growth in June, the highest in five months, largely driven by the inclusion of iron ore as the ninth core industry.

What is the Index of Core Industries (ICI)?

• • The ICI is a monthly indicator measuring the production performance of India’s key infrastructure and industrial sectors. 
  • It serves as an early indicator of industrial activity and significantly influences the Index of Industrial Production (IIP).

• Core Industries under the revised ICI (2022–23 Base Year): 

• • • The index now covers 9 industries – Coal, Crude Oil, Natural Gas, Refinery Products, Fertilisers, Steel, Cement, Electricity, and Iron Ore (newly added).
    • These sectors together account for 32.88% of the weight in the IIP, making ICI an important leading indicator of industrial growth.

• Timeline of ICI evolution: Initial series (1980–81), first revision (1993–94), Fertilisers and Natural Gas added (2004–05), and previous base year (2011–12).

‹ ›

Major Changes in the Revised ICI

• Inclusion of iron ore:
  • Iron ore has been added following the recommendations of the Praveen Mahto Committee (2025). It contributes 4.9% to the revised index.
  • Production surged 43.9% in June, significantly boosting overall core sector growth.
• Updated sectoral weights: Major changes in weights reflect the current structure of the economy –
  • Electricity now carries the highest weight (30.93%), replacing refinery products.
  • Weights of coal, crude oil and refinery products have declined.
  • Iron ore has been assigned a 4.9% weight.
• Methodological improvements:
  • Steel index is now compiled using gross production data.
  • Coal index includes only raw coal, excluding washed coal and coal middlings to avoid double counting.
  • Weights have been aligned with the revised IIP (2022–23 base year).

Performance of Core Industries (June 2026)

• Growth drivers:
  • Overall ICI growth: 5% (highest in five months).
  • Iron ore: 43.9% growth due to strong production and a low base effect.
  • Electricity: 9.8% growth, driven by higher power demand amid heatwaves and rainfall deficit.
  • Cement: 9.8% growth.
  • Steel: 4.6% growth.
  • Coal: 1.4% growth after three months of decline.
• Sectors under pressure: 
  • Production declined in petroleum-related industries –
    • Crude oil: –4.2% (18th consecutive monthly decline).
    • Natural gas: –7.4% (24th consecutive monthly decline).
    • Refinery products: –4.7% (third straight monthly decline).
    • Fertilisers: –3.3% (fourth consecutive decline).
  • Lower global crude oil prices increased imports, reducing domestic production of petroleum products and fertilisers.
• Revision of historical growth estimates: The revised series has altered earlier estimates –
  • 2024–25: Core sector growth revised down from 6.9% to 4.3%.
  • 2025–26: Growth revised up from 1.1% to 3%.
  • May 2026 growth: Revised upward from 1% to 3.2%.

ICI, IIP and ISP – India’s Three Monthly Economic Indicators

• ICI: Tracks production of 9 core sectors and released by OEA, DPIIT, with revised base year of 2022–23.
• IIP: Measures industrial output across Mining; Manufacturing; Electricity; Gas Supply & Water Supply, Sewerage and Waste Management (newly added) and released by National Statistical Office (NSO), MoSPI, with a base year of 2022–23.
• Index of Services Production (ISP): 
  • India’s first official monthly indicator measuring output in the formal services sector, and released by MoSPI, with a base year of 2024–25 (trial).
  • It covers 19 service sub-sectors, representing nearly 60% of India’s services sector.
  • Uses GST data and administrative records, rather than direct production surveys. 
  • Health and education are currently excluded due to GST exemption but are proposed to be included using administrative data, which could raise coverage to around 80%.
• Relationship:
  • ICI is a leading indicator of IIP, as core industries contribute 32.88% to the IIP.
  • ISP complements IIP, enabling monthly tracking of the services sector and providing a more comprehensive picture of economic activity.

Significance for the Economy

• The revised ICI strengthens India’s economic statistics by –
  • Providing an early signal of industrial and economic momentum.
  • Supporting evidence-based policy formulation.
  • Helping forecast GDP growth and industrial performance.
  • Tracking supply-side inflationary pressures.
  • Improving the representativeness and accuracy of official statistics through an updated base year and improved methodology.

Source: IE