Index of Eight Core Industries
The Index of Eight Core Industries (ICI) is a composite production index covering eight infrastructure-linked sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — that together carry approximately 40 per cent weight in the IIP.
The Office of the Economic Adviser (OEA) under India's Ministry of Commerce and Industry publishes the ICI monthly, typically with a one-month lag. Because the eight sectors have a combined weight of 40.27 per cent in the overall Index of Industrial Production, the ICI serves as the earliest available proxy for the IIP and is closely watched by bond markets, equity analysts, and the RBI's monetary policy committee.
Each of the eight sectors carries its own weight within the composite: refinery products (28.04 per cent), electricity (19.85 per cent), steel (17.92 per cent), coal (10.33 per cent), crude oil (8.98 per cent), natural gas (6.88 per cent), cement (5.37 per cent), and fertilisers (2.63 per cent). These weights were revised using the 2011–12 base year.
Coal and electricity output are sensitive to seasonal demand — particularly summer peak load — as well as to monsoon performance, which affects hydroelectric generation and coal dispatch logistics. Steel and cement are leading indicators of construction activity and capital expenditure cycles. A multi-month sequential improvement in steel production often signals that infrastructure and housing projects are scaling up, which has historically preceded earnings upgrades for companies in the capital goods and building materials sectors.
Crude oil and natural gas output reflect upstream E&P activity by state-owned entities such as ONGC and Oil India. Domestic production stagnation over many years meant India's crude import dependence remained above 85 per cent, making import bill calculations sensitive to global price movements rather than domestic supply changes.
Fertiliser production trends are linked to sown-area data and the kharif/rabi cropping cycle, providing advance signals for agrochemical and seed company revenue patterns. Refinery throughput, largely driven by IOC, BPCL, and HPCL, tracks domestic fuel demand.
Equity investors use the month-on-month and year-on-year ICI prints alongside PMI data to form a composite picture of the industrial cycle. A negative ICI surprise frequently weighs on industrial and infrastructure sector indices in intraday trading on the day of release.