Rare earth, gas supply, aircraft parts: What’s inside the new IIP calculus as India revises base year

The Ministry of Statistics and Programme Implementation (MoSPI) released the Technical Advisory Committee (TAC) report on the revision of the base year for t...

What Happened

The Ministry of Statistics and Programme Implementation (MoSPI) released the Technical Advisory Committee (TAC) report on the revision of the base year for the All-India Index of Industrial Production (IIP) from 2011-12 to 2022-23.
The new IIP series, comprising an updated basket of 1,042 items across 463 distinct categories, is scheduled to be officially launched on June 1, 2026.
The revised series aligns with the National Industrial Classification (NIC-2025) and introduces a new sector — Water Supply, Sewerage and Waste Management — alongside the existing Mining and Quarrying, Manufacturing, and Electricity and Gas Supply segments.
Within Mining and Quarrying, the new series creates three distinct sub-segments: fuel minerals, metallic minerals (including rare earth minerals), and non-metallic minerals (including minor minerals), reflecting the growing strategic importance of critical minerals.
The first release will provide index values from April 2023 onwards, including Quick Estimates for April 2026, using the Geometric Mean approach to link the old 2011-12 and new 2022-23 series.

Static Topic Bridges

Index of Industrial Production (IIP)

The IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products. It is compiled and published monthly by MoSPI. The IIP covers three broad sectors — Mining and Quarrying, Manufacturing, and Electricity — and uses a weighted arithmetic mean of production indices. The first IIP in India was computed for base year 1937, covering 15 industries; since then the base year has been revised successively (1946, 1951, 1956, 1960, 1970, 1980-81, 1993-94, 2004-05, 2011-12) to keep pace with structural changes in the economy.

Published by: MoSPI (Central Statistical Organisation, now merged into MoSPI)
Current (outgoing) base year: 2011-12
New base year: 2022-23 (effective June 1, 2026)
Old item basket: 809 items; New basket: 1,042 items across 463 categories
Methodology: Geometric Mean linking for chaining series
New sector added: Water Supply, Sewerage and Waste Management

Connection to this news: The base year revision to 2022-23 ensures that the IIP reflects the current industrial structure of the Indian economy, including emerging sectors such as critical minerals (rare earths), aircraft components, and gas supply, which had negligible weight or were absent in the 2011-12 basket.

National Industrial Classification (NIC)

NIC is the standard system for classifying economic activities in India, published by MoSPI. It is used as the framework for organising statistical data about industries across all government surveys and indices. The latest version, NIC-2025, updates the earlier NIC-2008, reflecting structural shifts in the economy including new technology-driven industries, advanced manufacturing, and services.

Published by: MoSPI
Latest version: NIC-2025 (aligns IIP, Annual Survey of Industries, and other statistical series)
Basis: International Standard Industrial Classification (ISIC) by the United Nations
Significance: Harmonises industrial data collection across central and state agencies

Connection to this news: The new IIP 2022-23 series is fully aligned with NIC-2025, enabling more accurate, internationally comparable data on Indian industrial production.

Critical Minerals and Rare Earths

Rare earth elements (REEs) are a group of 17 metallic elements comprising 15 lanthanides plus scandium and yttrium. They are critical inputs for advanced electronics, defence equipment, electric vehicle batteries, wind turbines, and aerospace components. India has significant rare earth deposits (primarily in Odisha, Andhra Pradesh, Kerala, and Tamil Nadu) managed through Indian Rare Earths Limited (IREL). Their explicit inclusion in the revised IIP reflects the government's push toward self-reliance in critical mineral supply chains.

India holds the world's fifth-largest rare earth reserves (approximately 6.9 million tonnes)
Rare earths are listed under India's Critical Minerals list (2023)
IREL (India) Ltd is the nodal PSU for rare earth extraction and processing
New IIP sub-segment: Metallic Minerals (includes rare earth minerals) under Mining and Quarrying

Connection to this news: For the first time, rare earth mineral production will have a dedicated sub-segment in the IIP, allowing policymakers to track output in a sector central to India's Atmanirbhar Bharat and critical minerals strategy.

Key Facts & Data

New IIP base year: 2022-23 (replacing 2011-12)
Launch date of new series: June 1, 2026
Item basket size: 1,042 items in 463 categories (up from 809 items)
New sector added: Water Supply, Sewerage and Waste Management
Mining sub-segments: Fuel Minerals; Metallic Minerals (incl. rare earths); Non-Metallic Minerals (incl. minor minerals)
Linking methodology: Geometric Mean
Data coverage in first release: April 2023 onwards, including Quick Estimates for April 2026
Base year revision history: 1937 → 1946 → 1951 → 1956 → 1960 → 1970 → 1980-81 → 1993-94 → 2004-05 → 2011-12 → 2022-23