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Relevance: Indian Economy (Industrial Growth, Macro Indicators & Energy Security) Source: Ministry of Commerce & Industry, June 2026

1 · The Monthly Report Card

On June 22, 2026, the government released the Index of Eight Core Industries (ICI) for May. Growth slipped to a seven-month low of just 0.5%. This is a sharp drop from April’s 1.8% growth rate.
The slowdown was driven by a struggling energy basket—coal, crude oil, natural gas, and refineries all saw negative growth. However, the economy was saved from shrinking entirely by strong performances in electricity, cement, and steel.

2 · Understanding the Core Industries

Think of the ICI as the foundation of India’s industrial economy. It tracks the production of eight basic industries that everything else relies on. Together, they make up 40.27% of the broader Index of Industrial Production (IIP).

The Players
Who Holds the Weight?
Refinery Products (28%) carry the most weight. They are followed by Electricity, Steel, Coal, Crude Oil, Natural Gas, Cement, and Fertilizers (the lightest at 2.6%).
The Winners
Infrastructure Kept Us Afloat
Electricity surged due to summer heat. Cement and Steel grew fast because the government continues to spend heavily on building roads and housing.
The Reason
Why Energy Dragged
Global conflicts in West Asia disrupted shipping and made imported crude oil cheaper than domestic oil. This discouraged local extraction and refinery production.
The Losers
Five Sectors Shrank
Coal saw the sharpest drop (-9.3%). Refinery Products (-8.7%), being the heaviest sector, did the most overall damage to the index.

  • The Domino Effect on IIP: Because these eight sectors make up 40% of the IIP, a weak core means India’s overall factory output will likely look weak this month too.
  • Coal’s Drop Isn’t All Bad: The sharp fall in coal production was mostly because power plants were using up old, stored stockpiles (“destocking”) rather than a sudden lack of demand.
  • India’s Safety Net: To survive global oil shocks, India stores emergency oil in Strategic Petroleum Reserves (SPRs) located at Vizag, Mangaluru, and Padur.
  • Policy Solutions: To fix this long-term, India is pushing the National Green Hydrogen Mission to fuel heavy industries cleanly and reduce reliance on imported fossil fuels.

Student Concept Guide
ICI (Index of Core Industries) A monthly scorecard tracking the output of 8 key foundational industries. Base year: 2011-12.
IIP (Index of Industrial Production) A broader scorecard tracking overall factory output, compiled by the NSO (Ministry of Statistics).
OEA & DPIIT The Office of the Economic Adviser under the Ministry of Commerce compiles the ICI data.
Strategic Petroleum Reserve (SPR) Emergency government stockpiles of crude oil (~9 days worth) to keep the country running during global supply crises.
National Green Hydrogen Mission A clean energy project targeting 5 MMT of green hydrogen by 2030 to replace fossil fuels in steel, cement, and fertilizers.

Check Your Understanding
Q. Regarding the Index of Eight Core Industries (ICI), consider the following statements:

  1. It is compiled and released by the National Statistical Office (NSO).
  2. These eight industries account for 40.27% of the total weight in the Index of Industrial Production (IIP).
  3. The current base year for calculating the index is 2011-12.

Which of the statements is/are correct?
(a) 1 and 2 only    (b) 2 and 3 only    (c) 1 and 3 only    (d) 1, 2 and 3

Answer: (b) 2 and 3 only

  • Statement 1 is Incorrect (The Trap): The ICI is compiled by the Office of the Economic Adviser (OEA) under the Ministry of Commerce. The NSO is responsible for compiling the broader IIP.
  • Statement 2 is Correct: The core sectors make up exactly 40.27% of the IIP’s weight.
  • Statement 3 is Correct: Both the ICI and the IIP currently use 2011-12 as their base year.
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