use strict;
use warnings;

my %ie;
my @id;

while (<>)
{
    if ( m#<indexEntry># ) # open
    {
        print;
        %ie = ();
        @id = ();
    }
    elsif ( m#</indexEntry># ) # close
    {
        # sort the primaries, secondaries, and tertiaries:
        for my $l ( keys %ie )
        {
            @{$ie{$l}} = sort @{$ie{$l}};
        }
        # output the munged record:
        for ( @id )
        {
            my( $id, $level, $iei ) = @$_;
            print qq(<${level}IE id="$id">$ie{$level}[$iei] </${level}
+IE>\n);
        }
        print;
    }
    elsif ( m#<(\w+)IE id="(\d+)">(.*)</\1[I]E># )
    {
        # collect the row of data:
        my( $level, $id, $text ) = ( $1, $2, $3 );
        push @{$ie{$level}}, $text;
        push @id, [ $id, $level, $#{$ie{$level}} ];
    }
    # else, invalid line of input.
}
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Assumes the data can be munged through a filter. If not, alter for input and output as appropriate.