Understand the classification and types of industries in India.
Analyze factors affecting the location of industries.
Identify key industries contributing to India’s economy.
Examine the industrial regions and policies shaping India’s industrial landscape.
India’s economic strength is significantly influenced by its manufacturing industries. These industries modernize the primary sector and reduce dependence on agriculture by creating employment. The country aims to generate 100 million skilled jobs in manufacturing, increasing its GDP contribution from 16% to 25% by 2022. The export of manufactured goods further boosts trade, commerce, and foreign exchange reserves.
Classification of Industries in India
Industries are classified by the Ministry of Commerce based on various factors, contributing uniquely to India’s economy:
Small and Medium Enterprises (SME): These constitute 40% of total exports, creating employment across diverse regions. Growth is driven by policy interventions like manufacturing management, IT adoption, skill development, access to capital, marketing, procedural simplification, and governance reforms.
Public Sector Enterprises: Engaged in sectors such as defense, energy, mining, and manufacturing, these industries include both large and medium-scale undertakings.
Employment Intensive Industries: Textiles, garments, leather, footwear, gems, jewelry, and food processing are labor-intensive industries, offering significant job opportunities.
Capital Goods Industry: The ‘mother industry’ for manufacturing, it includes machine tools, heavy electrical equipment, and mining equipment, driving various other industrial activities.
Industries with Strategic Significance: This includes aerospace, shipping, IT hardware, electronics, telecommunications, defense equipment, and solar energy, reflecting India’s strategic development goals.
Industries with Competitive Advantage: India has a global edge in automobiles, pharmaceuticals, and medical equipment industries.
Factors Affecting Location of Industries
The location of industries in India is influenced by a combination of natural resources, market needs, infrastructure, labor, historical development, and policy frameworks:
Raw Materials: Industries using weight-losing raw materials are set up near the sources of these materials to minimize transportation costs. Similarly, industries relying on perishable raw materials also locate close to the source.
Power: Vital for machine operations, power supply is a critical factor. Energy-intensive industries like aluminum and synthetic nitrogen manufacturing are usually situated near power sources.
Market: Proximity to markets is crucial for heavy machinery, tools, and chemical industries to ensure efficient distribution.
Transport: Historically, industrial concentration occurred in cities like Mumbai, Chennai, and Kolkata due to their transport links. Railways further facilitated the spread of industries to the interiors.
Labor: India’s large and mobile workforce makes labor availability a vital factor in industrial placement.
Historical Factors: Cities like Mumbai and Kolkata emerged as industrial hubs due to colonial influences, trade activities, and subsequent manufacturing expansions.
Major Industries in India
India hosts a diverse range of industries that form the backbone of its economy:
Iron and Steel Industry: This is the base industry supporting heavy, medium, and light machinery manufacturing. India is the second-largest producer of crude steel, with a strong presence in the Chota Nagpur plateau due to low-cost raw materials, labor, and market potential.
Aluminum Industry: The second most significant metallurgical industry, aluminum smelting requires electricity and bauxite. India’s eight smelting plants are located in states like Odisha, Kerala, and Chhattisgarh.
Cement Industry: A core industry with strong linkages to construction and transport. The industry uses limestone found nationwide. India, being the second-largest cement producer, is divided into five main regions, with the South holding the largest capacity.
Cotton Textile Industry: Comprising handloom, power loom, and mill sectors, this industry contributes 14% to industrial production and 4% to GDP. Maharashtra and Gujarat are the primary regions, owing to raw cotton availability and market access.
Important Note: The cotton textile industry is a vital employment provider, second only to agriculture.
Sugar Industry: As the second most important agro-based industry, India leads in sugarcane and cane-sugar production. The industry is shifting from northern to peninsular India due to better conditions, tropical climate, and modern management practices.
Lead, Zinc, and Copper Smelting: Lead smelting started in 1942 near Dhanbad, while zinc production began in 1965. Copper smelting has expanded post-independence with Hindustan Copper Limited leading. India meets only 50% of its copper needs, importing the rest.
Fertilizer Industry: It focuses on nitrogenous fertilizers like urea and phosphatic variants. As the third-largest producer of nitrogenous fertilizers, India heavily imports potash.
Petrochemical Industry: Derived from crude petroleum, petrochemicals form the basis for products like polymers, synthetic fibers, elastomers, and surfactants. Mumbai is the central hub, with other units in states like Gujarat and Andhra Pradesh.
Pharmaceutical Industry: India’s pharmaceutical sector ranks third globally in production volume, excelling in cost-effective generic drug manufacturing, including AIDS medicines.
Industrial Regions of India
Industries are not evenly distributed; factors like raw materials, power, labor, and transport shape their location:
Ahmedabad-Vadodara: Specializes in textiles, pharmaceuticals, petrochemicals, and engineering goods.
Mumbai-Pune: Known for textiles, automobiles, chemicals, electronics, and armaments.
Hugli Region: Hosts jute, textiles, engineering goods, and automobile industries.
Bengaluru-Coimbatore: Focuses on textiles, sugar refining, electronics, aircraft parts, and high-tech industries.
Chota Nagpur: Rich in minerals, this region has industries in iron, steel, locomotives, engineering goods, and cement.
Delhi and Adjoining Areas: Features textiles, chemicals, electronics, sugar refining, and automobile manufacturing.
Minor Industrial Regions and Districts
Some minor regions include:
Chennai: Cotton textiles, rail coaches, and rubber products.
Godavari-Krishna Delta: Known for tobacco, sugar, and textiles.
Nagpur-Wardha: Textiles, engineering goods, and clay industries.