India Revamps Core Industries Index: Iron Ore Added, Weights Shifted
The Union Government has released an updated series of its Index of Core Industries (ICI), a key measure of industrial activity in India's economy. This update aligns the ICI with other recently revised metrics such as national accounts (GDP and GVA), inflation, and the Index of Industrial Production (IIP).
The previous ICI used a base year of 2011-12, which had become outdated. The first major change is shifting the base year to 2022-23, making the index more reflective of current economic realities. The second change is the addition of a ninth sector: iron ore. The earlier eight sectors were coal, crude oil, natural gas, refinery products, steel, cement, electricity, and fertilizers. Iron ore was added due to its intensive use in industrial production.
Other sectoral adjustments include calculating steel production on a gross output basis instead of net output, bringing it in line with the IIP. In the coal sector, the updated series now measures only raw coal, excluding middling and washed coal. This change eliminates double counting, as both are derived from raw coal.
The inclusion of iron ore, with a weight of 4.905%, led to a redistribution of weights among all sectors. The government also revised weights to reflect those of the same sectors in the IIP. Coal's weight dropped from 10.33% to 5.596%, natural gas from 6.88% to 3.841%, and refinery products from 28.04% to 22.572%. Conversely, electricity rose from 19.85% to 30.932%, and fertilizers increased marginally to 2.731% from 2.63%.
Despite these changes, the overall industrial growth picture for recent years has not radically changed. For example, May 2026 ICI growth was revised from 0.5% (old series) to 3.2% (new series), but the full-year growth for 2025-26 was revised only slightly from 1.1% to 1%. The differences diminish over longer periods, indicating consistency in the underlying trend.
