Current Affairs · · GS3 · Economy

Core sector output grows 7.9% in September, fastest in new series

India's Index of Core Industries grew 7.9% in September 2026, the fastest in the revised series. Coal, refinery products and iron ore led, while fertilisers, natural gas and crude oil contracted. Part of the rise reflects a weak base last year, so one strong month does not confirm a lasting recovery.

Event date:

REq1
  1. Note1 / 5

    WHY IN NEWS?

    • The Index of Core Industries (ICI) grew 7.9% year-on-year in September 2026.
    • It is the highest growth recorded since the new series begins.
    • Coal, refinery products and iron ore drove the growth.
    • Fertilisers, natural gas and crude oil contracted; fertilisers fell for the seventh straight month.
    • Cumulative growth for April–September 2026 was 5.1%, against 2.5% a year earlier.
  2. Note2 / 5

    THE REVISED INDEX

    The Office of the Economic Adviser, DPIIT, released the new series on 20 July 2026. The table shows what changed.

    FeatureOld seriesNew series
    Base year2011-122022-23
    Number of industries89 (iron ore added)
    Steel dataNet productionGross production
    Coal dataRaw coal, washed coal, middlingsRaw coal only

    The nine industries are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity and iron ore.

  3. Note3 / 5

    KEY CONCEPTS

    1. What is the Index of Core Industries?

    It is a monthly index of output in nine basic industries that supply energy and materials to the economy. It is released before the IIP and works as an early signal of industrial trends.

    1. Why add iron ore?

    Iron ore is the main input for steel and is used intensively across industry. Including it captures mining activity better.

    1. What is a base effect?

    Growth is measured against the same month last year. If output was unusually low then, growth this year looks high even with modest gains. Coal fell 1.1% in September 2025, which lifted this year's figure.

    1. Why does the base year change?

    The economy's structure shifts over time. A newer base year updates weights so the index reflects today's industries.

  4. Note4 / 5

    WHAT THE NUMBERS SIGNAL

    • Strengths: Electricity and cement show steady demand from infrastructure and housing.
    • Fertiliser weakness: Seven months of decline raises concern, as India already imports large quantities.
    • Energy gap: Falling crude oil and natural gas output keeps India dependent on imports.
    • Climate tension: Coal-led growth sits uneasily with decarbonisation goals.
    • Caution: One strong month does not establish a trend; it should be read with IIP, investment and employment data.
  5. Note5 / 5

    WAY FORWARD

    These are suggested measures, not approved policy.

    • Raise domestic oil and gas output through exploration and better recovery.
    • Secure fertiliser supply by modernising plants and diversifying imports.
    • Cut logistics costs through PM GatiShakti and the National Logistics Policy.
    • Green heavy industry through cleaner power, recycled steel and low-carbon cement.

Sources

Syllabus

PaperSubjectSub-topic
GS3EconomyIndian Economy, growth and development, industry, infrastructure (energy, mining)
PrelimsEconomyIndex of Core Industries, IIP, base year revision

Topics

Agriculture and EnvironmentExternal Sector of IndiaIndustry

Related previous-year questions

Asked in earlier UPSC Prelims papers on this topic. Answer, then check.

  1. UPSC Prelims 2012 · Indian Economy · Industry

    In India, in the overall index of Industrial Production, the Indices of Eight Core Industries have a combined weight of 37.90%. Which of the following are among those Eight Core Industries? 1. Cement 2. Fertilizers 3. Natural Gas 4. Refinery products 5. Textiles Select the correct answer using the codes given below.

    1. 1 and 5 only
    2. 2, 3 and 4 only
    3. 1, 2, 3 and 4 only
    4. 1, 2, 3, 4 and 5
    Show answer

    Answer: C. Correct Answer: 1, 2, 3 and 4 only The Eight Core Industries are key infrastructure-related sectors used to measure the core strength of India’s industrial economy. Textiles is important for GDP, exports and employment, but it is not part of the Eight Core Industries. Explanation 1. Cement — Correct Cement is included in the Eight Core Industries. It is a key input for construction, housing and infrastructure development. 2. Fertilizers — Correct Fertilizers are included in the Eight Core Industries. They are directly linked to agricultural productivity and rural economy. 3. Natural Gas — Correct Natural Gas is included in the Eight Core Industries. It is used in power generation and also as an input in the fertilizer industry. 4. Refinery Products — Correct Refinery Products are included in the Eight Core Industries. They have the highest weightage among the eight core industries. 5. Textiles — Incorrect Textiles is not included in the Eight Core Industries. Do not confuse textiles with the broader Index of Industrial Production, where manufacturing sectors are covered separately. Extra UPSC Info * The Eight Core Industries are: Refinery Products, Electricity, Steel, Coal, Crude Oil, Natural Gas, Cement and Fertilizers. * They together account for 40.27% of the weight of items in the Index of Industrial Production. * Base year of the current IIP series is 2011-12. * The Index of Eight Core Industries is released monthly. * It is released by the Office of the Economic Adviser, DPIIT, Ministry of Commerce and Industry. * Refinery Products have the highest weightage, while Fertilizers have the lowest weightage. Final Takeaway Cement, Fertilizers, Natural Gas and Refinery Products are core industries, but Textiles is not included in the Eight Core Industries.

    Difficulty: medium · statement

    Open this question on its own page, with the full explanation →

  2. UPSC Prelims 2015 · Indian Economy · Industry

    In the 'Index of Eight Core Industries', which one of the following is given the highest weight?

    1. Coal production
    2. Electricity generation
    3. Fertilizer production
    4. Steel production
    Show answer

    Answer: B. VERDICT: The answer is electricity generation. Electricity carries the highest weight among the eight core industries. ANALYSIS: The eight core industries are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity, and together they account for a substantial share of the Index of Industrial Production. Electricity holds the largest weight of the eight, ahead of steel, coal and cement. Fertiliser production, offered as an option, carries one of the smaller weights in the group and is the weakest candidate of the four. SOURCE: Economic Survey appendix, table A-42. Source type EM. HOW TO CRACK IT: Rather than memorising every weight, reason from economic scale: the core industry that touches every other industry as an input, and whose output value is the largest, is the one likely to be weighted highest. Electricity is consumed by all the others, which makes it the natural first guess. Keep two anchors for this index, the list of eight items and the top weight, because UPSC asks either the composition or the ranking rather than exact numbers, and the composition changes far less often than the weights.

    Difficulty: hard · direct

    Open this question on its own page, with the full explanation →

Practice questions

  1. The Index of Core Industries is released by:

    1. National Statistics Office
    2. Office of the Economic Adviser, DPIIT
    3. Reserve Bank of India
    4. NITI Aayog.
    Show answer

    Answer: B. The OEA under DPIIT, Ministry of Commerce and Industry, compiles it monthly.

    Difficulty: medium · statement

  2. Which industry was added to the Index of Core Industries in the revised 2022-23 series?

    1. Aluminium
    2. Iron ore
    3. Copper
    4. Bauxite.
    Show answer

    Answer: B. Iron ore's addition raised the count from eight to nine.

    Difficulty: medium · statement

  3. Consider the following statements about the revised ICI: 1. Its base year is 2022-23. 2. It uses net production data for steel. Which is/are correct?

    1. 1 only
    2. 2 only
    3. Both
    4. Neither.
    Show answer

    Answer: A. The new series uses gross steel production to stay consistent with the IIP.

    Difficulty: medium · statement

Mains practice

Answer-writing practice on this article. Attempt it first, then open the hints.

  1. GS3 · 250 words

    Core sector growth has picked up, but output of crude oil, natural gas and fertilisers continues to decline. Discuss the implications for India's industrial growth and energy security.

    Show hints
    1. Base effect
    2. ICI–IIP link
    3. import dependence, fertiliser supply
    4. coal and decarbonisation
    5. logistics.