Index of Eight Core Industries, Significance, Index of Industrial Production

Q: What is the Index of Eight Core Industries (ICI)?

The ICI is a production volume index that measures the collective and individual performance of eight key industries driving India’s industrial growth.

Q: Which are the eight core industries included in the ICI?

The eight industries are: Natural Gas, Coal, Refinery Products, Crude Oil, Cement, Electricity, Steel, and Fertilizers.

Q: Who releases the Index of Eight Core Industries?

It is released by the Office of the Economic Adviser (OEA), under the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry.

Q: What is the significance of the eight core industries?

They form the backbone of industrial activity, contribute 40.27% to the IIP, and influence economic growth, inflation, and other industries.

Q: How is the ICI calculated?

The ICI is calculated using the Laspeyres formula, which uses the weighted arithmetic mean of quantity relatives, with weights aligned to the Index of Industrial Production (IIP).

Table of Contents☰

The Index of Eight Core Industries (ICI) measures the production performance of eight key sectors that drive India’s industrial growth, including Coal, Steel, Electricity, and Refinery Products. These core industries are significant as they contribute 40.27% to the IIP and influence overall economic activity and other industries.

The Index of Industrial Production (IIP) complements the ICI by tracking short-term changes in the volume of production across manufacturing, mining, and electricity sectors. Together, the ICI and IIP provide a clear picture of industrial trends and economic health in India.

The Eight Core Industries

The eight core industries are considered drivers of industrial growth due to their large contribution to economic activity. These industries collectively account for 40.27% of the weight of items in the Index of Industrial Production (IIP).

Refinery Products
Electricity
Steel
Coal
Crude Oil
Natural Gas
Cement
Fertilizers

Index of Eight Core Industries

The weightage of the eight core industries in the ICI indicates their relative contribution to overall industrial production, with Refinery Products having the highest weightage (28.04%) and Fertilisers the lowest (2.63%). These weights help assess the impact of each sector on the economy.

Index of Eight Core Industries
Industry	Weightage (%)
Refinery Products Industry	28.04
Electricity Industry	19.85
Steel Industry	17.92
Coal Industry	10.33
Crude Oil Industry	8.98
Natural Gas Industry	6.88
Cement Industry	5.37
Fertilizers Industry	2.63

Significance of the Eight Core Industries in India

The eight core industries are considered the backbone of India’s industrial sector, as they have a direct impact on overall economic growth and industrial output.

These industries form the backbone of India’s industrial sector.
They contribute 40.27% to the Index of Industrial Production (IIP).
Their performance acts as a leading indicator of economic health.
Growth in these sectors supports employment, energy supply, and manufacturing.
They have a major influence on other industries in the economy.
Performance impacts GDP growth, inflation, and trade balance.

About Index of Industrial Production (IIP)

The Index of Industrial Production (IIP) is an economic indicator that measures the short-term changes in the volume of production of a basket of industrial goods in India. It reflects the performance of the industrial sector, which includes manufacturing, mining, and electricity.

Compiled by: Ministry of Statistics and Programme Implementation (MoSPI), Government of India.
Base Year: 2011-12 (revised from earlier 2004-05).
Sectors Covered: Mining, Manufacturing, and Electricity.
Purpose: To monitor industrial performance, inform policy decisions, and act as a leading indicator of economic activity.
Release Frequency: Monthly, with a one-month lag.
Use in Economy: Helps in analysing sectoral growth, inflation trends, and overall industrial development.