Context
India’s industrial output remained stable in July 2026, with the Index of Industrial Production (IIP) at 124.8, the same as the revised figure for June 2026.
About IIP
- It is a statistical indicator that measures changes in the volume of industrial production over time against a fixed base year.
- It is compiled and released monthly by the National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
- Current base year: 2022–23; the base-year index is set at 100.
- Release frequency: Monthly, with a time lag of about 28 days from the reference month.
- Broad Sector Weights in IIP
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- Manufacturing: ~78%, (largest weight)
- Mining: ~14%
- Electricity: ~8%
Key Features of the Revised IIP Series
1. Wider Sectoral Coverage: The revised series includes Gas Supply, Water Supply, Sewerage and Waste Management activities.
2. Broader Mining Coverage: It incorporates minor minerals and rare earth minerals, improving representation of the mining sector.
3. Expanded Item Basket: The basket has increased from 839 to 1,042 products, grouped into 463 item groups.
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- New additions: Magnetic-stripe cards, CCTV cameras, non-woven textile articles, aircraft and spacecraft parts, stents, and non-veterinary vaccines.
- Items removed: Kerosene, fluorescent tubes and CFLs, various bicycle/tricycle/rickshaw and LMV tyre tubes, printing machinery and sewing machines.
4. Greater Classification Detail: Mining is now divided into:
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- Fuel Minerals
- Metallic Minerals, including Rare Earth Minerals
- Non-Metallic Minerals, including Minor Minerals
5. Improved Electricity Classification: Electricity generation is separately measured for renewable and non-renewable sources, providing a clearer picture of the changing energy mix.
Eight Core Industries
1. The Index of Eight Core Industries (ICI) covers eight major sectors that together account for 27% of the total IIP weight, making them important indicators of industrial activity.
2. Their approximate weights, in descending order, are:
- Refinery Products – 28.04%
- Electricity – 19.85%
- Steel – 17.92%
- Coal – 10.33%
- Crude Oil – 8.98%
- Natural Gas – 6.88%
- Cement – 5.37%
- Fertilizers – 2.63%
Significance
- Timely Indicator: Provides a monthly measure of industrial activity and helps track production trends.
- Better Representation: The revised series captures newer industries and changing production patterns more effectively.
- Policy Support: Helps the government and policymakers assess industrial performance and short-term economic trends.
Limitations
- Limited Coverage: IIP does not cover the entire economy, particularly the large services sector.
- Output, Not Quality: IIP measures changes in production volume, but does not directly capture improvements in product quality, productivity or efficiency.
- Sectoral Bias: The index gives greater weight to manufacturing, so changes in heavily weighted industries can significantly influence the overall IIP.
| Feature | Index of Industrial Production (IIP) | Consumer Price Index (CPI) | Wholesale Price Index (WPI) | Producer Price Index (PPI) |
| What it measures | Change in industrial production volume | Change in retail prices and cost of living | Change in wholesale prices of goods | Change in prices received/paid at the producer level |
| Base Year | 2022–23 | 2024 | 2022–23 | 2022–23 |
| Published by | NSO, MoSPI | NSO, MoSPI | OEA, DPIIT* | OEA, DPIIT |
| Frequency | Monthly | Monthly | Monthly | Monthly; services quarterly |
| Services covered? | No | Yes | No | Yes |
| Main components | Manufacturing, Mining, Electricity and utilities | Heavy focus on Food & Beverages (~47%), followed by Housing, Fuel, Clothing, and Misc. Services. | Manufactured Products (~64%),
Primary Articles (~23%), Fuel & Power (~13%) |
Output PPI, Input PPI and Service PPI |
| Items covered | 1,042 products | 358 items | 957 items | 125 core items, expanding over time |
| Main use | Tracks industrial performance and supports economic growth assessment | Measures consumer inflation; used by RBI for monetary policy | Tracks wholesale price trends and support price adjustment | Tracks producer-level price changes and can signal future price pressures |
* Office of Economic Adviser (OEA), Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry
Conclusion
The IIP is an important high-frequency indicator of India’s industrial performance and short-term economic activity. Its revised series provides broader coverage and better classification, making it more useful for economic policymaking and growth assessment.
FAQs
Q1. What is the current base year of IIP?
Ans. The current base year is 2022–23, with the index for the base year set at 100.
Q2. What are the major sectors covered by IIP?
Ans. IIP covers Manufacturing, Mining and Electricity, with the revised series also expanding coverage to Gas Supply, Water Supply, Sewerage and Waste Management.
Q3. What is the significance of the Eight Core Industries?
Ans. The Eight Core Industries together account for 40.27% of the total IIP weight, making their performance an important indicator of industrial activity.
Q4. How is IIP different from CPI, WPI and PPI?
Ans. IIP measures changes in production volume, while CPI, WPI and PPI measure price changes at the consumer, wholesale and producer levels, respectively.
Q5. What is a key limitation of IIP?
Ans. IIP mainly measures industrial output and does not cover the broader services sector or changes in product quality, productivity and efficiency.
