What is the Index of Core Industries (ICI)?
The Index of Core Industries (ICI) is a vital macroeconomic indicator compiled monthly by the Office of Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry.
Key Functions:
- Measures combined and individual production performance of India's foundational industrial sectors
- Serves as a leading indicator of industrial activity in the economy
- Provisional ICI for a reference month is released on the 20th of the following month
- Functions as a subset of the broader Index of Industrial Production (IIP)
Nine Core Industries and Their Weights (2022-23 Base)
The revised ICI covers nine core industries:
| Industry | Weight (%) |
|---|
| Electricity | 30.93 |
| Refinery Products | 22.57 |
| Steel | 17.58 |
| Crude Oil | 7.43 |
| Coal | 5.59 |
| Iron Ore | 4.90 |
| Cement | 4.41 |
| Natural Gas | 3.84 |
| Fertilizers | 2.73 |
Major Methodological Changes (New Series)
1. Addition of Iron Ore
- Expanded from 8 to 9 core industries by including Iron Ore
- Recognizes its extensive use in steel manufacturing and vital contribution to industrial development
2. Revisions in Existing Sectors
- Steel Index: Now compiled using Gross Production Data (previously Net Production Data) for consistency with revised IIP
- Coal: Only Raw Coal retained; Coal Middling and Washed Coal excluded to eliminate double counting
- Sectoral weights updated using IIP (Base Year 2022-23) and normalized to 100
3. Introduction of Linking Factor
- Ensures historical comparability between old and new series
- Linking Factor = Geometric Mean of monthly ICI (old series, 2022-23) / Geometric Mean of monthly ICI (new series, 2022-23)
- Linking Factor for Overall ICI = 1.47
ICI Performance: June 2026
Year-on-Year Growth:
| Industry | Y-o-Y Growth (%) |
|---|
| Iron Ore | +43.9 |
| Electricity | +9.8 |
| Cement | +9.8 |
| Steel | +4.6 |
| Coal | +1.4 |
| Natural Gas | Negative |
| Crude Oil | Negative |
| Refinery Products | Negative |
| Fertilizers | Negative |
Key Highlights:
- Overall ICI growth: 5.0% (June 2026), improving from 3.2% (May 2026)
- Cumulative growth (April-June 2026): 3.6%, compared to 1.0% in corresponding period of previous year
- Major growth drivers: Iron Ore and Electricity
Difference Between ICI and IIP
| Aspect | Index of Core Industries (ICI) | Index of Industrial Production (IIP) |
|---|
| Primary Scope | Core infrastructure industries | Overall industrial sector |
| Compiling Agency | OEA, DPIIT, Ministry of Commerce & Industry | NSO, Ministry of Statistics & Programme Implementation (MoSPI) |
| Coverage | 9 Core Industries | Manufacturing, Mining, Electricity (hundreds of items) |
| Weight in Economy | 32.88% of IIP (new base) | 100% (comprehensive index) |
| Economic Utility | Indicates health of critical infrastructure sectors; identifies supply-side bottlenecks | Used by RBI and Government for monetary and fiscal policy formulation |
Significance for India's Economy
Why ICI Matters:
- Leading Indicator: Provides early signals of industrial and economic health
- Policy Formulation: Helps government identify bottlenecks and formulate industrial policies
- RBI's Role: Critical input for monetary policy decisions
- Investment Decisions: Used by businesses and investors to assess industrial sector performance
Industrial Policy Implications:
- Base year revisions ensure indices reflect current industrial structure
- Adoption of improved methodologies
- Updated sectoral weights provide more accurate estimates
- Enhanced international comparability
Constitutional/Policy Framework
- Ministry of Commerce and Industry: Responsible for formulating and implementing industrial policy
- DPIIT: Promotes industrial development and coordinates trade policies
- NSO (MoSPI): Responsible for statistical data collection and publication of IIP
- RBI: Uses ICI data for monetary policy formulation