The Indian government has added iron ore to the Core Sector index, expanding the list to nine key industries. This update, effective with a new 2022-23 base year, aims to provide a more accurate picture of industrial performance by removing double counting for coal products. A revised data series will be released on July 20.
The Indian government is updating its measurement of industrial health by adding iron ore to the country's core sector group. This change brings the total number of industries tracked in the Index of Core Industries (ICI) to nine. By including iron ore, policymakers aim to better capture the actual momentum of the manufacturing and infrastructure sectors, as iron ore serves as a critical raw material for steel production.
New Base Year and Data Changes
Starting July 20, 2026, the government will move to a new base year of 2022-23 for the ICI, replacing the older 2011-12 series. This shift is designed to better align economic data with current industrial realities. Alongside the transition, authorities are removing coal middlings and washed coal from the index. This adjustment is intended to stop double counting, as these items are already accounted for within raw coal production figures.
Impact on Steel and Industrial Reporting
Investors and analysts should note a change in how steel production data is compiled. The revised index will now use gross production data for the steel sector, shifting away from the net production figures used in the previous 2011-12 series. This aligns the core sector reporting with the Index of Industrial Production (IIP), which should lead to more consistent data across government economic reports.
Understanding the Data Release
To help market participants analyze long-term trends, the Ministry of Commerce and Industry will provide a back series covering 38 months, from April 2023 to May 2026. This, along with the provisional data for June 2026, will help in comparing past performance under the new weights. These weights have been redistributed to ensure the total basket sums to 100, based on 2022-23 data from the Ministry of Statistics and Programme Implementation.
Investors tracking this data may observe how the new weightage impacts the index's volatility and growth readings compared to the old series. Since the core sector acts as a lead indicator for broader economic health, the refined data will be a key metric for understanding trends in infrastructure-linked industries like mining and steel.