The Index of Industrial Production (IIP) is a concept and a composite indicator that measures the short-term changes in the volume of production of a selected basket of industrial products in India. The first official attempt to compute the IIP was made by the Office of the Economic Adviser, Ministry of Commerce and Industry, with the base year 1937, to provide a consistent, high-frequency measure of the country's industrial output. The all-India IIP has been released on a monthly basis since 1950.
The IIP is compiled and published monthly by the National Statistical Office (NSO), which operates under the Ministry of Statistics and Programme Implementation (MoSPI). The mechanism involves comparing the current production of a fixed basket of items to a chosen base year, which is assigned a value of 100. The index tracks production across three broad sectors: mining, manufacturing, and electricity, with manufacturing holding the largest weight. The output of the eight core industries (refinery products, electricity, steel, coal, crude oil, natural gas, cement, and fertilisers) accounts for approximately 40.27% of the total weight.
As a crucial macroeconomic indicator, the IIP connects directly to policy formulation, as it is used by government agencies like the Ministry of Finance and the Reserve Bank of India (RBI), and is a key input for the estimation of Gross Domestic Product (GDP). The index has undergone multiple revisions to reflect structural changes in the economy. Most recently, the base year was revised from 2011-12 to 2022-23 (FY23), a change introduced on May 31, 2026. This 10th revision expands the product basket and broadens sectoral coverage to include areas like gas supply and water supply, sewerage, and waste management, while the core function of measuring industrial volume growth remains the same.