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Index of eight core industries rises 2.3% in February 2026

March 20, 2026 4 min read Economics GS3
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What Happened

  • The Index of Eight Core Industries (ICI) rose by 2.3% in February 2026 compared to February 2025, with steel and cement leading growth while energy sectors contracted.
  • Cement recorded the highest growth at 9.3%, followed by steel at 7.2%, reflecting resilience in construction and manufacturing activity.
  • Three energy-related sectors contracted: crude oil (−5.2%), natural gas (−5.0%), and petroleum refinery products (−1.0%), dragging overall index performance.
  • Electricity generation grew only 0.5%, the weakest among the positive performers; coal production grew 2.3% and fertilisers expanded 3.4%.
  • The data highlights a structural bifurcation: construction-linked sectors thriving while domestic energy production continues to decline.

Static Topic Bridges

Index of Eight Core Industries (ICI) — Composition and Weightage

The ICI measures monthly output across eight infrastructure-linked industries that together account for 40.27% of the weight of items included in the Index of Industrial Production (IIP). The eight sectors are: coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement, and electricity. Each sector carries a specific weight reflecting its share in the overall industrial economy (base year: 2011–12 = 100). Petroleum refinery products carry the highest weight (28.04%), making that sector's contraction disproportionately significant for the overall index even when other sectors perform well.

  • Petroleum Refinery Products: 28.04% (highest weight)
  • Electricity: 19.85%
  • Steel: 17.92%
  • Coal: 10.33%
  • Crude Oil: 8.98%
  • Natural Gas: 6.88%
  • Cement: 5.37%
  • Fertilisers: 2.63% (lowest weight)
  • The eight sectors combined account for 40.27% of IIP weight.
  • ICI data is released by the Office of the Economic Adviser (OEA), Ministry of Commerce and Industry.

Connection to this news: The outperformance of cement (+9.3%) and steel (+7.2%) — despite their moderate weights (5.37% and 17.92%) — was offset by contraction in petroleum refinery products (weight: 28.04%), limiting overall ICI growth to 2.3%.

Steel and Cement as Infrastructure Demand Proxies

Steel and cement are leading indicators of construction and infrastructure activity. Growth in these sectors reflects both government capital expenditure (roads, railways, housing) and private sector investment (real estate, industrial plants). India's National Infrastructure Pipeline (NIP) and PM Gati Shakti National Master Plan are among the policy drivers sustaining demand for these inputs. India became the world's second-largest steel producer (surpassing Japan) in 2023 and is one of the largest cement producers globally, with installed capacity exceeding 600 MTPA.

  • India's steel production capacity: over 160 MTPA (as of 2025).
  • India's cement production capacity: over 600 MTPA (world's 2nd largest producer after China).
  • PM Gati Shakti NMP: ₹100 lakh crore infrastructure investment plan coordinating 16 ministries.
  • National Steel Policy 2017 targets 300 MTPA steel capacity by 2030.
  • Steel and cement together account for 23.29% of ICI weight.

Connection to this news: The 9.3% cement and 7.2% steel growth in February 2026 signal continued momentum in construction and infrastructure execution, consistent with government capex push priorities.

Crude Oil and Natural Gas — Structural Decline in Domestic Production

India's domestic crude oil production has been in long-term decline, falling from a peak of ~38 MMT in 2011–12 to around 29–30 MMT currently, due to ageing oilfields (primarily Mumbai High operated by ONGC) and limited new discoveries. Natural gas production faces similar constraints. India imports over 85% of its crude oil requirements, making it the world's third-largest oil importer and highly vulnerable to global price shocks. Declining domestic output intensifies import dependence.

  • India imports approximately 85–88% of its crude oil requirement.
  • Major domestic producers: ONGC (largest), Oil India Limited (OIL).
  • Mumbai High field (ONGC) accounts for the largest share of domestic crude production.
  • India's crude import bill: approximately $140–160 billion/year.
  • HELP (Hydrocarbon Exploration and Licensing Policy), 2016 — replaced the old NELP, introduced revenue sharing model to attract private and foreign investment.

Connection to this news: Crude oil's 5.2% contraction and natural gas's 5.0% decline in February 2026 are consistent with the structural trend of falling domestic production, reinforcing India's energy import vulnerability.

Key Facts & Data

  • Overall ICI growth, February 2026: +2.3% (year-on-year)
  • Cement: +9.3% (weight: 5.37%)
  • Steel: +7.2% (weight: 17.92%)
  • Fertilisers: +3.4% (weight: 2.63%)
  • Coal: +2.3% (weight: 10.33%)
  • Electricity: +0.5% (weight: 19.85%)
  • Petroleum Refinery Products: −1.0% (weight: 28.04%)
  • Crude Oil: −5.2% (weight: 8.98%)
  • Natural Gas: −5.0% (weight: 6.88%)
  • ICI base year: 2011–12 = 100
  • ICI's share in IIP weight: 40.27%
  • Releasing authority: Office of the Economic Adviser, Ministry of Commerce and Industry