In the first print of the revised Index of Core Industries (ICI) with the new base year of 2022-23, growth of India’s nine core sectors accelerated to a five-month high of 5 per cent in June from 3.2 per cent in May, as sharp growth in iron ore, power and coal offset persistent weakness in petroleum-based industries, according to data released by the Ministry of Commerce and Industry on Monday.
The reading marked the beginning of a new series, which replaces the previous 2011–12 series and expands the basket from eight to nine sectors by including iron ore. The growth rate under the new base shows an improvement compared to the print under the old base, with the May reading rising from just 0.5 per cent to 3.2 per cent under the new series.
“The bounce has been added to by iron ore,” said Madan Sabnavis, chief economist at Bank of Baroda.
The overall index stood at 119.6 in June, down from 120.1 in the previous month.
Iron ore, which holds a 4.9 per cent weighting in the nine-sector index, rose 43.9 per cent in June on a year-ago contract basis, emerging as the biggest driver of headline growth. Growth in the sector reached its highest level compared to back-series data for April 2024.
The rebasing exercise has substantially reset the weightings of the index. The share of electricity under the old series has increased from 19.85 per cent to 30.9 per cent, making it the most heavily burdened sector, while petroleum refinery products – which was earlier the heaviest at 28.04 per cent – has been reduced to 22.6 per cent.
Electricity grew 9.8 percent compared with 11.2 percent in May, slightly slower than the previous month but still a major contributor to the headline numbers.
Under the new series, the weightings of coal, natural gas and crude oil have been reduced, while the weightings of steel and fertilizer have remained largely unchanged.
The data showed that five out of nine sectors recorded positive growth during the month, with iron ore, power, cement, steel and coal in positive territory, while natural gas, crude oil, refinery products and fertilizers declined.
With cement output hitting a five-month high of 9.8 per cent and steel output hitting a 21-month low of 4.6 per cent, Sabnavis attributed the strength in the two key sectors to the private sector and continued government spending.
Coal returned to positive territory after three consecutive months of contraction, growing 1.4 per cent in June against a 9.5 per cent contraction in May. “The monsoon factor was at play when mining slowed down here,” Sabnavis said.
The petroleum complex remained the main hurdle. Crude oil production fell 4.2 percent and natural gas output declined 7.4 percent, a 5 percent contraction in May. The contraction in natural gas production was the sharpest since April 2024.
While the decline in refinery products slowed to 4.7 per cent from 8.2 per cent in May, fertilizer production declined by 3.3 per cent for the fourth consecutive month.
ICRA Principal Economist Rahul Agarwal attributed the fertilizer slowdown to the continued adverse impact of West Asia tensions.
Sabnavis said the negative growth in crude oil-related sectors could be attributed to higher imports coupled with falling global crude prices. “Exports of refinery products have slowed down this month. In case of fertilizers, imports have increased,” he said.
The share of the core sector in the Index of Industrial Production (IIP) is about 40 percent. Bank of Baroda expects IIP growth to be around 3-4 percent in June.
Cumulatively, the index rose 3.6 per cent during April-June 2026, compared with 1 per cent in the same period a year ago.