Industries - Factors affecting Locations, Major Industries in India

The establishment of an industry in a specific area results from a series of decisions made at various levels. These decisions are influenced by both geographical and non-geographical factors. Certain geographical factors play a significant role in decision-making, such as the availability of raw materials, power resources, water, labor, markets, and transport facilities. These factors, while crucial, may vary in importance over time and across different locations.

It's important to note that besides purely geographical elements, other factors of historical, human, political, and economic nature are increasingly becoming more influential in determining industrial locations. As a result, the factors guiding industrial location decisions can be broadly categorized into two groups:

• Geographical factors:
• Non-geographical factors: 

GEOGRAPHICAL FACTOR

1- RAW MATERIAL

The Fundamental Role of Raw Materials in Industrial Location

• Industrial enterprises, in many instances, find their location intricately tied to the availability and proximity of raw materials. 
• The complexity of modern industry demands a diverse array of raw materials for its sustained growth and development.
• It's essential to recognize the interconnected nature of industries, where the finished product of one industry frequently serves as the raw material for another. 
• For instance, pig iron, a product of the smelting industry, becomes a crucial raw material for the steel-making industry. 
• This interconnectedness underscores the importance of proximity between industries involved in successive stages of production.
• Industries that heavily rely on bulky and weighty raw materials in their primary stages tend to cluster near the sources of these materials. 
• This strategic proximity is particularly evident in cases where raw materials undergo weight loss during the manufacturing process or are sensitive to high transportation costs. 
• Alfred Weber's seminal theory of the location of industries, dating back to 1909, recognized the profound impact of these considerations.
• Regions such as West Bengal, Uttar Pradesh, Maharashtra, and Gujarat witness a concentration of specific industries near the sources of raw materials. 
• Notable examples include jute mills in West Bengal, sugar mills in Uttar Pradesh, and cotton textile mills in Maharashtra and Gujarat. 
• Industries with high consumption of coal and iron ore, such as iron and steel, strategically position themselves near the sources of these essential materials.

2- POWER

Power Supply and Industrial Localization: A Crucial Nexus

The consistent availability of power is a prerequisite for the strategic localization of industries, playing a pivotal role in determining their geographical distribution. Conventional sources of power, including coal, mineral oil, and hydroelectricity, hold paramount importance in this regard, with industries often gravitating towards their primary source of energy.

1. Source of Power for Iron and Steel Industry:

Industries such as iron and steel, reliant on substantial quantities of coking coal, frequently establish themselves in proximity to coal fields. This concentration ensures a reliable and cost-effective source of power for their operations.

2. Hydroelectric Power and Electro-Metallurgical Industries:

Electro-metallurgical and electrochemical industries, characterized by a significant demand for cost-effective hydroelectric power, are often situated in areas with abundant hydropower production. Notable examples include the aluminum industry, which flourishes in regions with robust hydroelectric infrastructure.

3. Petroleum and Electricity Transmission:

The ease of piping petroleum and transmitting electricity over long distances through wires provides the flexibility to disperse industries over a broader geographic area. Industries have moved to southern states only when hydro-power became viable in these regions, overcoming the historical constraints of coal-deficient areas.

4. Economic Advantage in Power and Raw Materials:

More than any other factor influencing the location of large and heavy industries, the quest for the best economic advantage in obtaining power and raw materials remains a driving force. Industries strategically position themselves to harness the most cost-effective and reliable sources of energy and raw materials.

5. Examples of Strategic Industrial Localization:

Instances such as the Tata Iron and Steel Plant in Jamshedpur, the new aluminum producing units at Korba (Chhattisgarh), and Renukoot (Uttar Pradesh), the copper smelting plant at Khetri (Rajasthan), and the fertilizer factory at Nangal (Punjab) exemplify this principle. These industrial establishments are strategically located near abundant sources of power and raw material deposits, optimizing their economic efficiency.

3-LABOUR

The Significance of Labor Force in Industrial Location Decisions

The presence of an existing labor force is undeniably attractive to industries, unless compelling reasons suggest otherwise. The importance of labor supply in industrial location decisions is twofold:

(a) Quantity of Workers:

Industries often require a substantial number of workers. The availability of a labor force is crucial for industries that operate on a large scale, as a sizable workforce is essential for efficient production and operations.

(b) Skill and Technical Expertise:

Labor supply is equally important for industries that demand specific skills or technical expertise. Access to a skilled workforce is indispensable for the success of industries involved in technology-intensive or specialized production processes.

(c) Labor Costs and Industry Variation:

Estall and Buchanan's 1961 study revealed that labor costs vary significantly across industries. Labor costs can range from 62 percent in clothing and related industries to 29 percent in the chemical industry, with fabricated metal products industries falling at 43 percent. This underscores the industry-specific nature of labor considerations.

(d) Mechanization and Labor Demand:

Despite increasing mechanization in the country, modern industries in India still rely on a substantial number of workers. While unskilled labor can be readily secured in large urban centers, the demand for labor persists in various industries, influencing their location decisions.

(e) Balancing Factors in Location Decisions:

Although the location of industrial units involves a careful balancing of multiple factors, light consumer goods and agro-based industries tend to prioritize a plentiful labor supply. These industries often benefit from being situated where a robust labor force is readily available.

4-TRANSPORT

The Vital Role of Transportation in Industrial Location

The efficient transportation of raw materials and the marketing of finished products is a fundamental requirement for industrial operations. The development of transportation infrastructure, whether by land or water, significantly influences the location of industries. A notable example is the impact of railways in India, connecting port towns with the hinterland, which played a crucial role in determining the location of many industries around major urban centers such as Kolkata, Mumbai, and Chennai.

1. Railways and Industrial Location:

The advent and expansion of railways in India have had a profound effect on industrial location decisions. The connectivity established by railways, linking coastal areas with the interior regions, has been a key factor in the establishment of industries around major port towns. Kolkata, Mumbai, and Chennai, being well-connected by railways, became focal points for industrial development.

2. Impact on Marketing and Raw Material Procurement:

Efficient transportation is essential for assembling raw materials from diverse sources and distributing finished products to markets. The accessibility provided by transportation networks significantly influences the location choices of industries, ensuring a smooth flow of inputs and outputs.

3. Reciprocal Relationship:

There exists a reciprocal relationship between industrial development and transportation improvement. While industrial growth necessitates robust transport facilities, the development of transportation infrastructure, in turn, facilitates industrial expansion. This interdependence makes it challenging to quantify how much a particular industry owes to the original transport facilities available in a specific area.

4. Connectivity and Urban Centers:

Urban centers with well-established transportation networks become attractive hubs for industrial activity. The availability of railways and other transportation modes around major cities not only facilitates the movement of goods but also enhances the accessibility of the workforce.

5. Evolution Over Time:

The impact of transportation on industrial location evolves over time. Initial transport facilities in a region can serve as a catalyst for industrial growth, but subsequent industrial development often contributes to further improvements in transportation infrastructure.

5- WATER

Water is a crucial requirement for various industries, leading to the establishment of many industrial units near rivers, canals, and lakes. Industries such as iron and steel, textiles, and chemicals, which rely on substantial water usage, are often strategically located near abundant water sources.

6-SITE 

Site considerations are paramount in industrial development. Suitable sites should be flat and well-connected with efficient transport facilities. The need for extensive areas to build factories is a critical factor. In recent trends, there is a growing inclination to set up industries in rural areas due to the escalating costs of land in urban centers.

7- CLIMATE

Climate significantly influences the choice of industrial locations. Harsh climates, whether extremely hot, humid, dry, or cold, are generally unsuitable for industrial development. For instance, the extreme climate in northwest India may hinder industrial growth. In contrast, the moderate climate of the west coastal area, such as Maharashtra and Gujarat, is conducive to industrial development.

Industrial Concentration and Climate:

Climate considerations contribute to the concentration of industries in specific regions. The Maharashtra-Gujarat region alone hosts about 24 percent of India's modern industries and employs 30 percent of the industrial labor force. The moderate climate in this region facilitates industrial development, while extreme climates may act as deterrents.

Industry-specific Climate Requirements:

Certain industries, like the cotton textile industry, have specific climate requirements. For instance, a humid climate is crucial for the cotton textile industry to prevent thread breaks. Consequently, a concentration of cotton textile mills is observed in regions like Maharashtra and Gujarat, where the climate meets these specific needs. While artificial humidifiers can be used in dry areas, it adds to the overall production cost.

NON GEOGRAPHICAL FACTOR

Non-Geographical Factors Shaping Industrial Location

Modern scientific and technological advancements have led to the utilization of alternative raw materials in industries, reducing the traditional influence of geographical factors. The availability of electric power over wider areas and increased labor mobility further diminishes the impact of geography on industrial location. Instead, non-geographical factors, including economic, political, historical, and social considerations, play a significant role in shaping the location of industries.

1. Capital:

Industries, especially modern ones, require substantial capital for establishment. Capital-intensive industries with significant investments often cluster around urban centers where big capitalists reside. Cities like Mumbai, Kolkata, Delhi, and Chennai emerge as major industrial centers due to the availability of capital.

2. Government Policies:

Government interventions, including planning for regional development, pollution control, and avoiding excessive clustering in large cities, have become crucial factors in industrial location decisions. Industrial estates, planned distribution of industries, and the impact of Five Year plans in India exemplify the influence of government policies on industry locations.

3. Industrial Inertia:

Industrial inertia refers to the tendency of industries to persist in their original locations even when the initial factors driving their establishment may have changed. The reluctance to relocate is often due to the high costs associated with moving fixed capital assets and labor. The lock industry in Aligarh serves as an example of industrial inertia.

4. Efficient Organization:

Effective organization and management are essential for the successful operation of modern industries. Poor management can lead to financial trouble, labor unrest, and even industry closure. Efficient handling of the labor force is critical to avoiding strikes and lockouts, emphasizing the need for effective management in industrial operations.

5. Banking Facilities:

Areas with better banking facilities are deemed more suitable for industrial establishment. Given the significant financial transactions involved in industrial operations, robust banking facilities are essential for daily financial exchanges, making such areas more conducive to industrial activities.

6. Insurance:

Insurance facilities play a crucial role in safeguarding industrial setups against potential damages to machines and personnel. The constant fear of industrial accidents and damage necessitates the availability of insurance facilities, making areas with robust insurance infrastructure more attractive for industrial establishments.

In conclusion, non-geographical factors wield substantial influence in the contemporary landscape of industrial location. Capital availability, government policies, industrial inertia, efficient organization, banking facilities, and insurance infrastructure collectively shape the spatial distribution of industries, reflecting the evolving dynamics of industrial development.

FAQs: Understanding Factors Influencing Industrial Location

1. What are the primary considerations in deciding the location of an industry?

Ans. The location of an industry results from a series of decisions influenced by both geographical and non-geographical factors. Geographical factors include raw materials, power resources, water, labor, markets, and transport facilities, while non-geographical factors encompass economic, political, historical, and social elements.

2. How do raw materials impact the industrial location decision?

Ans. Raw materials play a fundamental role in industrial location. Industries often cluster near the sources of raw materials, with the finished product of one industry becoming the raw material for another. Weight, transport costs, and perishability influence these decisions, as seen in industries like jute mills in West Bengal and iron and steel units near coal and iron ore sources.

3. How does power supply influence industrial localization?

Ans. A regular and cost-effective power supply is crucial for industrial localization. Industries, such as iron and steel, align themselves with the source of power, like coal fields. Hydroelectric power attracts industries like electro-metallurgical and electrochemical units, exemplified by the aluminum industry. The economic advantage in obtaining power and raw materials often drives strategic industrial localization.

4. What role does the labor force play in industrial location decisions?

Ans. The presence of a labor force is attractive to industries. Both the quantity of workers and the availability of skilled or technically adept individuals influence location decisions. Despite increasing mechanization, modern industries in India, including light consumer goods and agro-based industries, often require a large and skilled workforce.

5. How does transportation impact industrial location?

Ans. Efficient transportation of raw materials and finished products is vital for industries. The development of transportation infrastructure, whether by land or water, significantly influences location decisions. The historical role of railways in connecting port towns with the hinterland in India is a prime example of how transportation shapes industrial location.

6. What additional geographical factors contribute to industrial location decisions?

Ans. Other geographical factors include the availability of water, suitable sites, and climate. Industries reliant on water, like iron and steel, often establish themselves near rivers and lakes. Suitable flat sites, well-served by transport, are preferred for industrial development. Climate considerations, such as humidity for cotton textile mills, also play a role.

7. How have modern advancements impacted the influence of geographical factors on industrial location?

Ans. Modern scientific and technological developments, coupled with increased mobility of labor and alternative raw materials, have diminished the impact of geographical factors. Electric power supply over wider areas allows industries to disperse, and the availability of alternatives reduces the dependency on specific geographic locations for raw materials.

8. What are the key non-geographical factors shaping industrial location today?

Ans. Non-geographical factors include capital availability, government policies, industrial inertia, efficient organization and management, banking facilities, and insurance infrastructure. These factors collectively shape the spatial distribution of industries in the contemporary industrial landscape.

9. How does government policy influence industrial location?

Ans. Government policies, such as those focused on regional development, pollution control, and reducing disparities, play a crucial role in industrial location decisions. Planning for industrial estates and the impact of Five Year plans in India are examples of government interventions influencing the distribution of industries.

10. How does industrial inertia affect the location of industries?

Ans. Industrial inertia refers to the tendency of industries to persist in their original locations even when the initial factors may have changed. High costs associated with relocating assets and labor often lead to industries remaining in their established locations, showcasing the impact of historical decisions on industrial geography.