Relevance: GS3 – Indian Economy (IIP, industrial performance) | Source: The Hindu ; IIP; PIB; ICI reports
News in Brief
India’s Index of Eight Core Industries (ICI) recorded 0% growth in October 2025, the weakest performance in 14 months. Growth in steel, cement, fertilisers and refinery products was offset by contractions in coal, electricity, natural gas and crude oil.
The Eight Core Sectors & Their Significance
|
Sector |
Why it Matters |
| Coal | Key input for power generation; affects energy security. |
| Crude Oil | Base for petroleum products; impacts import bill. |
| Natural Gas | Used in fertilisers, power & industries. |
| Refinery Products | High export component; affects trade balance. |
| Fertilisers | Critical for agriculture & food security. |
| Steel | Indicator of construction & manufacturing demand. |
| Cement | Linked to infrastructure & housing activity. |
| Electricity | Backbone for industry; reflects real economic activity. |
Together, they form 40.27% of the Index of Industrial Production (IIP).
What is IIP?
The Index of Industrial Production (IIP) measures the volume of industrial output in manufacturing, mining and electricity.
Published by National Statistical Office (NSO), base year 2011–12.
Future Outlook: Challenges & Way Ahead
|
Challenges |
Way Ahead |
| Weak demand due to prolonged monsoon and delayed festive season | Improve coal logistics and enhance domestic production |
| Slump in mining and crude oil output | Strengthen natural gas pipeline & storage infrastructure |
| High input costs and global commodity volatility | Accelerate infrastructure spending to boost cement & steel demand |
| — | Provide policy incentives for refinery expansion & clean-energy transition |
Q. Consider the following statements:
- Electricity has the highest weight among the Eight Core Sectors.
- The Eight Core Sectors account for more than one-third of the weight of the Index of Industrial Production.
Which of the statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (b)
(Highest weight: Refinery Products, not electricity; share in IIP ≈ 40%)
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