Classification of Industries

Classification of Industries on the basis of Raw materials, Nature of product, Size and investments, and Ownership are discussed below

Classification of Industries on the basis of Raw materials

IndustriesExamples
Agro-based Industries: Use agricultural products as raw materialsCotton textiles and tea industry
Mineral-based Industries: Use minerals as raw materialsIron and steel industry
Forest-based industries: Use forest products as raw materialsWood industry
Animal-based Industries: Use raw materials provided by animalsSilk and woollen industry

Classification of Industries on the basis of Nature of product

IndustriesExamples
Heavy industries: Manufacture heavy and bulky goodsHeavy industries: Iron and steel industry
Light industries: Produce lightweight goodsLight industries: Bottle industries

Classification of Industries on the basis of Size and investments

IndustriesExamples
Large-scale industries: Has huge infrastructure and requires large capital investmentsIron and Steel Industry
Medium-scale industries: Are neither big nor smallPaper mills
Small-scale industries: Are small and have only small capital investmentsWeaving industry

Classification of Industries on the basis of Ownership

IndustriesExamples
Public sector industries: Owned by the governmentIOC and SAI
Private-sector industries: Owned by individualsReliance and Wipro
Joint sector industries: Owned and managed by both government and private individualsMaruti Suzuki and Exide Industries
Cooperative sector industries: Owned by producers and distributers collectivelyAMUL and IFFCO

Geographical Factors Affecting the Location of Industries

  • Raw Materials: Industries are mostly established at areas which are located close to the fields of raw materials. For example, many iron and steel industries are located near the iron and coal fields. Industries dealing with the manufacturing of perishable goods are located close to the source of raw materials. For example, sugarcane industries are located close to the sugarcane fields as the sucrose content of sugarcane starts drying up after 24 hours of its harvest.
  • Water Supply: Industries require water while manufacturing goods. For example, water is used in textile industries for bleaching and washing purposes. Thus, many industries are located close to the sources of water.
  • Energy: Energy is required for processing raw materials into manufactured goods. Thus, many industries are located close to the coal fields. Industries are also located in regions where energy power resources are readily and cheaply available.
  • Transport: Transport is required for carrying raw materials to manufacturing units. It is also required for transporting finished goods to markets. Thus, many industries are located near the port cities which are also well-connected by road and rail to major towns and market cities.
  • Labour: The availability of skilled and unskilled labour is an important factor which decides the location of industries. Thus, many industries are located at places where cheap labour is readily available.
  • Proximity to Markets: Industries require markets to sell off their finished goods. For example, heavy industries are located in an industrial area as their products are required by other small industries.
  • Climate: It plays an important role in determining the location of agro-based industries. For example, many cotton textile mills are located in Mumbai and Gujarat as it has a favourable climate which is required for storing and manufacturing cotton yarn.

Commercial Factors Affecting the Location of Industries

  • Policies of the Government: The policies of the government play an important role in deciding the location of industries. The government makes rules and regulations for the supply of water and electricity. Further, it formulates policies for protecting and encouraging indigenous industries.
  • Capital: Many industries are located in the big cities where most financers and investors are present. Thus, many big cities are also major industrial centres.
  • Organisational Skills: Organizational skills and technical knowledge are required for running any industry. As a result, we find that many industries are located near educational and management institutes to hire skilled people.

Also, Read Need for Rapid Industrialization in India