Economic activity in India’s core industrial sectors saw growth slow to 5.4% in July 2026 from 6% in June, according to official data released on Thursday (August 20, 2026). This was driven by a significant slowdown in the fertilisers, iron ore, and steel sectors, accompanied by a continued contraction in the natural gas and crude oil sectors. 

The data on the Index of Core Industries (ICE) released by the Ministry of Commerce and Industry, however, showed that July’s growth was still the second-fastest in seven months. The Ministry released a new series of the ICE in July, which means that a historical comparison is possible only up to June 2025.  

Within the index, the fertilisers sector contracted 8% in July 2026, as compared to a contraction of 3.3% in June. The sector had grown 1.9% in July of last year. This performance is likely due to the deficient and patchy ongoing monsoon, and the resultant lower levels of sowing taking place. 

The iron ore sector saw growth slowing to 29.5% in July 2026, from 44.5% in June. However, it is important to point out that these relatively high growth levels are on a low base, since the sector contracted 16.4% and 7.1% in June and July of last year, respectively. 

This low base effect was also apparent in the coal sector’s 11-month high growth rate of 7.6% in July 2026. The sector had contracted 12.3% in July last year. 

Growth in the steel sector slowed to 2.9% in July 2026, the lowest in the 14 months for which there is data, down from 5.6% in June. 

The natural gas and crude oil sectors continued their long streak of contractions. The natural gas sector contracted 3.7% in July 2026, while the crude oil sector contracted 5.3%. Both sectors have contracted continuously for the last 14 months for which there is data. 

The refinery products sector, however, snapped a three-month streak of contractions by growing 2.7% in July 2026, the sector’s best performance in nine months. 

The two relative bright spots among the core sectors were the cement and electricity sectors. The electricity sector grew 9% in July 2026, albeit slower than the 11.4% seen in June. The cement sector saw growth hit 13.1% in July 2026, a seven-month high, over a 11.1% growth in July last year. 

The Index of Core Industries (ICI) has finally joined the country’s other economic metrics in becoming up-to-date and representative of the economy. The other metrics such as the national accounts, Consumer Price Index (CPI), Wholesale Price Index (WPI), and the Index of Industrial Production (IIP) were updated earlier this year, although even those were after considerable delays. The ICI has now joined their ranks with the June data being based on a new series with an updated base year, an additional sector being covered, and revised weights and methodologies. This is a welcome upgrade. The performance of these core industries is a vital barometer of the state of the economy. In the new series, the previous eight sectors have become nine, with the vital inclusion of the iron ore sector. Improvements have also been made to how the steel and coal sectors are measured in order to remove the previous double-counting that was taking place. The addition of a sector would naturally change the distribution of weights of the sectors in the index, but the final weights also reflect a broader shift in economic activity. The coal and natural gas sectors have seen their weights nearly halve to about 5.6% and 3.8%, respectively. On the other hand, the electricity sector now makes up more than 30% of the index from less than 20% in the previous series. All of this perhaps reflects the rising share of renewables in electricity generation, even as demand for electricity itself surges.

The performance of the index in June 2026, with a five-month-high growth of 5%, would suggest that Indian industry is shrugging off the slump induced by the West Asia crisis. However, two of the strong growth numbers — iron ore by 43.9% and electricity by 9.8% — were due to a statistical base effect since both sectors had contracted in June last year. It remains to be seen whether the numbers will remain this positive once that base effect wears off in the months ahead. The new series highlights some of the systemic issues that the old series did, such as the persistent contraction of the crude oil and natural gas sectors. They have contracted continuously for 18 and 24 months, respectively. If India does not have these resources, that is one thing. But if it has them and still is not able to extract them economically, then that is a serious shortcoming. The update of the ICI and the recent upgrade of the WPI would have been a good time for a broader statistical reorganisation. With the Ministry of Statistics and Programme Implementation handling the CPI and the IIP, it only makes sense for the WPI and ICI to move to it from their current home in the Ministry of Commerce and Industry. That change can still be made.

The story so far: The Union Government has released an updated series of its Index of Core Industries (ICI), which is a key measure of how the main industrial sectors in India’s economy are doing. This update now brings the ICI on a par with other recently updated metrics such as the national accounts (Gross Domestic Product and Gross Value Added), inflation, and the Index of Industrial Production (IIP).

What are the key changes in the new ICI series?

The previous ICI had a base year of 2011-12, which was significantly outdated. So, the first major update of the new series of the index was to bring forward the base year to 2022-23. This makes the data more reflective of current reality, and thus makes it a more useful gauge of industrial activity.

The second major change was to increase the number of sectors covered to nine from the previous eight. The eight sectors earlier covered were coal, crude oil, natural gas, refinery products, steel, cement, electricity, and fertilizers.

Now, the government has said that owing to the intensive use of iron ore in industrial production, it has been added to the list of core industries.

Other sectoral changes include calculating steel production on a gross output basis rather than a net output basis so as to bring this in line with the IIP, which is the other major industrial production metric.

In the coal sector, the updated series will only measure raw coal, and has excluded middling and washed coal. This change was made to eliminate the double counting that occurred in the previous series, as both middling and washed coal are made using raw coal.

Which sectors have gained or lost weight in the new ICI?

The inclusion of the iron ore sector and the resultant increase in the total number of sectors to nine would naturally lead to a redistribution of the weights among the sectors. Further, according to the government, it has revised the weights in the new series of the ICI to reflect the weights of the same sectors in the IIP.

Both of these factors have led to a significant redistribution of weights among the sectors of the ICI. The newly added iron ore sector has been assigned a weight of 4.905% in the index, leaving that much less of the total share to be distributed among the other sectors.

The coal sector has seen a big downward revision in its significance, with its weight coming down from 10.33% to 5.596%. The natural gas sector, too, saw a major downward revision from 6.88% to 3.841%. Refinery products saw its weightage reduced from 28.04% to 22.572%.

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Some sectors increased in significance. The electricity sector, for example, now makes up 30.932% of the entire index, up from the earlier 19.85%. The fertilizers sector saw its weightage increase marginally to 2.731% from 2.63%.

Have these revisions changed the final growth picture?

There is certainly a difference in the data output generated from the old series and the new series for the same periods of time. However, these variations become smaller when scaled up over time and as you move further back. That is, while the May 2026 growth of the ICI has been revised from 0.5% as per the old series to 3.2% in the new series, the full-year growth for 2025-26 was only revised from 1.1% to 1%.

Therefore, just because the series has been updated, it does not mean that the industrial growth picture for the past few years has radically changed.

Growth in activity in India’s core industrial sectors accelerated to 5% in June 2026, the fastest in five months, as per the inaugural release of the new and updated series of the c (ICI).

The Ministry of Commerce and Industry on Monday (July 20, 2026) released the new series of the ICI, with an updated base year of 2022-23 as compared to the earlier 2011-12. Further, the updated index has an additional sector of iron ore added to it, taking the total number of sectors it covers to nine. The sectoral weights and methods of estimation have also been updated.

“The Index of Core Industries grew by 5% in June 2026 (provisional estimate) on a year-on-year basis, compared with June 2025,” the Office of Economic Adviser in the Department for Promotion of Industry and Internal Trade (DPIIT) said. “This marks an improvement over the growth rate of 3.2% recorded in May 2026 (final estimate).”

The index last grew faster in January 2026 when it hit a growth of 5.2%, as per the new series. 

Within the index, the fastest growth was recorded by the new entrant — iron ore — which grew 43.9% in June 2026 as compared to 19% in May. This growth, however, was likely due to a statistical base effect, since the sector contracted 16.4% in June last year.

“Owing to intensive use of iron ore in the production process, and its contribution to industrial development, it has been included in the list of core industries as a new item in the revised series of ICI (base year 2022-23),” the Ministry said in a statement. 

Nearly all the sectors relating to hydrocarbon energy and its products, such as crude oil (-4.2%), natural gas (-7.4%), refinery products (-4.7%), and fertilisers (-3.3%) contracted in June 2026. 

“The entire crude oil related sectors — crude oil, gas, refinery products and fertilizers — witnessed negative growth in June which can be attributed to higher imports with global crude prices cooling off,” Madan Sabnavis, chief economist at the Bank of Baroda said. “The export of refinery products had slowed down this month. In case of fertilizers, imports tended to increase.”

The only energy sector to have witnessed growth was the coal sector, which grew 1.4% in June 2025, snapping a three-month streak of contraction. 

The steel sector grew 4.6% and the cement sector hit 9.8% in June 2025, which Mr. Sabnavis said was a result of spending by both the government and the private sector.

Electricity generation grew by 9.8% in June 2026, building on a growth of 11.2% in May, with experts attributing this to the heat wave in some parts of the country, as well as higher demand from industry. 

The Ministry of Commerce and Industry will on July 20 release an updated Index of Core Industries (ICI) with a new base year of 2022-23 and recalibrated industries and weightages. 

With this, all of India’s main economic metrics — capturing its national accounts, inflation levels, and industrial performance — will have been updated and upgraded.

The revised series will replace the existing ICI series which has a base year of 2011-12. The release on July 20 will include the provisional ICI for June 2026 along with the back series from April 2023 to May 2026.

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“As per the established methodology, the weights for the ICI (2022-23) series have been derived from the weights of the Index of Industrial Production (IIP) 2022-23 series released by the Ministry of Statistics and Programme Implementation (MoSPI),” the Commerce Ministry said in a statement. 

“The weights of the ICI basket items, drawn from the IIP, have been redistributed on a pro-rata basis to total 100 for finalising the weights of the ICI item basket,” it added.

The current ICI includes eight sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity. The new series will include nine sectors. 

The Ministry also explained that, in view of the extensive use of iron ore in industrial production and its significant contribution to industrial development, iron ore has been included as a core industry in the revised ICI series. 

As far as methodological changes are concerned, the statement added that the revised ICI series will use gross production data for compiling the steel index, replacing the net production data used in the 2011-12 series of the ICI.

Further, for the coal sector, only raw coal has been retained in the revised ICI series. That is, coal middlings and washed coal have been excluded to eliminate double counting, as both are derived from raw coal, the government said.