6.

Minerals and industrial location

Manufacturing industries

1. Location
1. Market: Closeness to market, demand in the market, paying
capacity of the market are key determinants in location factors.
Cotton textile industries are close to urban centres like Mumbai,
Ahmedabad, etc.
2. Labour: Cheap labour and adequate availability is a key issue.
China has seen remarkable growth in manufacturing because of
availability of surplus labour and low wages.
3. Raw materials: Industries using weight losing raw materials are
located close to the raw-material sources. Ex: Sugar mills in India
are close to the sugarcane growing areas. Iron and steel industries
near coal fields or iron ore mines.
4. Transport: Adequate and cheap transport is essential for transport
of inputs and finished goods. The Rhine valley in Germany has
emerged as a manufacturing hub because of the extensively
developed waterway.
5. Power: It is a significant factor for energy intensive industries.
Canada and Norway have aluminium refineries despite having no
bauxite resources because of cheap electricity from hydro power.
6. Government policy: Establishment of iron and steel industry in
Bhilai and Rourkela were based on decision to develop backward
tribal areas.
7. Industrial inertia: High capital industries are reluctant to shift
their bases despite change in market condition due to the well
established supply chain and government policies. Detroit still
boasts automobile companies despite slowing market and labour
availability.
8. Geography: The topography, climate of the area is another
determinant. Canada has numerous paper mills because of the
economies of scale of lumbering in its coniferous forests coupled
by cheap transport through the rivers.
2. Risk reduction measures in industrial areas
1. Densely populated residential areas should be separated far away
 from the industrial areas.
2. People staying in the vicinity of industries should be aware of the
storage of toxins or hazardous substances and their possible
effects in case if an accident occurs. This empowers people about
possible potential hazards.
3. Fire warning and fighting system should be improved.
4. Storage capacity of toxic substances should be limited.
5. Pollution dispersion qualities in the industries should be
improved.
3. Agglomeration economies
1. Many industries benefit from nearness to a leader industry and
other similar industries. These benefits are termed as
agglomeration economies. Savings are derived from the linkages
which exist between different industries.
2. Many industries tend to come together to make use of the
advantages offered by the urban centres. Industrialisation and
urbanisation go hand in hand. Cities provide markets and also
provide services such as banking, insurance, transport, labour,
consultants and financial advice, etc. to the industry
4. Why Hooghly industrial belt developed
1. This belt developed around Kolkata as the nucleus. The mouth of
river Hooghly presented ideal conditions for development of a
port. The Ganga and Brahmaputra linked the belt with rich
hinterland. These links were later supplemented and strengthened
by rail and road links.
2. Kolkata was the British Indian capital from 1773 to 1911. This
ensured continuous British capital investment.
3. Tea plantations in close proximity in Assam and Bengal,
processing of indigo earlier and jute later coupled with the
discovery of coal and iron ore in the Chhotanagpur Plateau region
contributed to the industrial development of the Hooghly
industrial region.
4. Cheap labour was easily available from thickly populated and out-
migrating states of Bihar, Orissa and eastern Uttar Pradesh.
5. Presently, this region supports a variety of industries which
include iron and steel, heavy engineering, rail equipment,
transport equipment, chemicals, oil refining, agro-processing,
textiles, paper, fertilisers and diverse consumer goods.
5. Why Ahmedabad-Vadodara belt developed
1. This region is characterised by an inland location in the cotton
growing Gujarat plains.
2. The decline of cotton textile industry of Mumbai due to high
transportation costs of cotton from the peninsular region and easy
access of Ahmedabad-Vadodara region to raw cotton worked to
the advantage of this belt.
3. The petrochemical industry around Vadodara and Ankleshwar
developed after oil was discovered in the Gulf of Cambay.
4. Location of Kandla port is an obvious advantage.
5. The densely populated northern plains in close proximity provided
an easy market.
6. Chotanagpur region
1. Discovery of coal and iron in the Bihar-Orissa belt and location of
these resources in close proximity to each other facilitated easy
utilisation.
2. Easy availability of power from the Damodar Valley Project and
from coal-based thermal power projects helped in
industrialisation.
3. Availability of cheap labour from Bihar, Orissa and eastern Uttar
Pradesh was of great advantage.
4. Proximity to port and access to large market in the vicinity also
worked to the advantage of this belt.
7. Mumbai-Pune region
1. In 1774, the British acquired the island of Mumbai as a site to
develop a port.
2. In 1853, the 34-km Mumbai-Thane rail ushered in
industrialisation. Opening of routes to Pune and to Nasik extended
the region’s influence to the hinterland.
3. The opening of the Suez canal in 1869 established closer links
with Europe. This facilitated easy import of capital goods through
the port.
4. Easy availability of raw cotton from the black soil belt of the
Narmada and Tapti. Coastal humid climate which was ideal for
weaving and spinning of cotton.
5. Easy availability of hydel power from the Western Ghats.
6. Location of the port on the west coast which ensured ready access
 to western markets.
8. Southern region
1. This region is dominated by cotton textiles as raw material is
readily available from cotton growing tracts.
2. Cheap hydroelectric power from Mettur, Sivasundaram and
Sharavati dams.
3. High grade iron ore and limestone from Bhundiguda, manganese
from Shimoga and other raw materials are easily available.
4. Well connected links to nearby areas through road, rail and as well
through ports.
5. Availability of cheap skilled labour, proximity to local market and
a good humid climate.
6. The famous Visvesvaraya Iron and Steel Plant was set up because
of these favourable factors. Coimbatore and Madurai are famous
for cotton and silk textiles. Other important areas of this industrial
region are Sivakasi for firecrackers and Mettur in Mysore for
handicraft and sandalwood articles.

Shale gas

Challenges in Shale gas

1. Water intensive: The hydraulic fracking techniques huge quantities of

water to pump the gas to the surface.
 2. Water contamination: Water after hydraulic fracturing is flowed back
to the surface and may have high content of dissolved solids and other
contaminants.
3. Land acquisition: Requirements are much greater than conventional
gas.
4. Seismic risks: Zone III-V earthquake prone regions.
5. Other challenges like scientific and credible resource assessment.

Foot-loose industries

1. Footloose industries are those industries whose location is not

influenced by either access to material or markets, and which can
therefore operate within a very wide range of locations.
2. These industries often have spatially fixed costs, which means that the
costs of the products do not change despite where the product is
assembled. These industries usually requires a very small production
space, are usually less polluting and but require highly skilled workers.
Ex: Bakery, watch-manufacturing, IT, diamond cutting, electronics
goods, automotive firms etc.

3.
4. Factors
1. Transport and communication links is one of the most important
factors, as it is important to be close to good roads and rail links
so that industries can receive supplies and distribute products.
 2. Government policies are instrumental in creating each set of local
conditions and influence their location in terms of favourable
legislation, tax concession, grants and loans and promotional
benefits.
3. Cheap and skilled labour is one more very important factor
determining location of footloose. Ex: IT industry concentrated in
Bangalore.
4. Capital availability and ancillary services is another important
factor, as it needed to start a business and provide basic input.
Generally these industries tend to develop where financial services
are easily accessible.
5. Increasing land prices effects the location and now these footloose
industries are establishing on the edge of cities as land is often
cheaper there than in the centre.
6. Availability of infrastructure and agglomeration, related
infrastructure and provisioning services are dealt through
government policies and advantage of cheaper land, energy
supplies, and other costs of doing business attract them. Further
agglomeration will decrease cost of production by external
economies of scale.

Sugar industry

1. It needs irrigation and is planted in February and harvested in October.

Sugar mills are located near sugar growing areas, because sugar is a
perishable crop and needs quick transportation. For sugar, warmer
climate gives better yield. So, Maharashtra grows thicker variety of
sugarcane.
2. Proximity to ocean can lead to less temperature variations, so it
increases the sugar yield and crushing season can be longer. Black lava
soil is fertile and retains water. So, it is good for growth. If labour
available are more, cost of production is low.
3. India stands second as a world producer of sugar but occupies the first
place in the production of gur and khandsari. In recent years, there is a
tendency for the mills to shift and concentrate in the southern and
western states, especially in Maharashtra. This is because the cane
produced here has a higher sucrose content.
4. Also, in South India there is no loo, no frost and moderating effect of
 ocean makes it ideal for sugarcane growth. The cooler climate also
ensures a longer crushing season. Moreover, the cooperatives are more
successful in these states.
5. Suited to cooperative sector
1. Sugar production is seasonal in nature. Once the sugar growing
season is out, farmers have nothing to do. So, they form
cooperatives and pool their resources to process the sugarcane by
themselves. This give them better profits and they will not be out
of work at any time in the year.
2. Cooperative sector has been more successful in southern and
western states, which also provides favourable climatic conditions
for sugar to grow.
3. To save the farmers from violent fluctuations in the Gur, Jaggery
and Sugar markets.
4. Facilitates socio-economic, educational and cultural development
of the entire area surrounding the sugar factories.

Fisheries industry

1. Fisheries contribute 5% of agriculture GDP and 0.6% of total GDP.

Fishes eat plankton and Phytoplankton require sunlight. So fishes can
develop well in continental shelves and shallow seas because of
Sunlight penetration and minerals from coastal water.
2. Some fishing grounds
1. They are more in number where cold currents and warm currents
 meet. Ex: Gulf stream and Labrador in North western Atlantic
coast, Kurushio and Oyashio in Japan.
2. Dogger bank, Great bank in Europe. Grand bank, George bank,
Nova Scotia, Newfoundland in US and Canada.
3. Factors suitable
1. Fish gutting leads to weight loss. Hence fish processing is either
done on the vessel or near the coastal plants.
2. Highly indented coastline provides many sites for harbours and
ports, so more fish can be caught.
3. The cool temperate climate favours large scale commercial
fishing, preservation and storage of fish. While tropical areas are
hot and moist where fish cannot be stored for long.
4. In hilly terrain areas due to cold long winters agriculture is not
practised, so more people switch to fishing. Ex: Iceland, Japan,
Norway.
4. Northern America and Europe vs Asia
1. Asia has tropical climate, where fish cannot be stored for long.
While N.America and Europe have temperate cool climate which
favours long storage.
2. Asia has relatively smooth coast line. So, less natural harbours
than Europe, N.America.
3. Continental shelves in Asia are narrower than Europe, North
America.
4. Commercial fishing requires large ships, which can scan fishes for
optimal location in seas and can process them. Such vessels and
technology require massive capital investment which is available
in Europe, America but not much in Asia.
5. In tropical regions of Asia, variety of fishes occur in smaller
groups, so not good for large scale commercial exploitation.
6. Tropical fishes have higher oil content which makes them less
desirable for eating.
5. Northern Hemisphere vs Southern Hemisphere
1. Population size is high in North Hemisphere, so fish demand is
large. In Southern hemisphere nations such as Argentina, New
Zealand and Australia, meat and dairy products are plenty. So, not
much demand for fishes.
2. Continental shelves in Southern Hemisphere are narrower than
 Europe, North America.

6. In India why western coast has more fish production

1. Commercial varieties like Prawns and Mackerel are mostly
confined along western coast.
2. The Kerala coast largely experiences significant upwelling during
south-west monsoon period, resulting in abundant phytoplankton.
3. Only one third of full time fishermen are located on India’s east
coast, while two thirds are from the west coast only.
4. While traditional catamarans are common along the east coast,
most fisheries production from the west coast is derived from the
mechanised sector.
5. Fisheries in the backwaters and estuaries of west coast tend to be
undertaken throughout the year whereas the marine coastal fishery
(mostly in east coast) is seasonal with a regulated, variable closed
season during the monsoon period.

Iron and Steel industry

1. The three essential inputs for iron and steel industry are iron ore, coking
coal and limestone, water for cooling and energy for heating. In iron
and steel industries, iron ore and coal both are weight-losing raw
materials. Therefore, an optimum location for iron and steel industries
should be near raw material sources. This is why most of the iron and
steel industries are located either near coalfields (Bokaro) or near
sources of iron ore (Bhadravati, Bhilai, and Rourkela).
2.
3. Locational factors
1. Near iron ore mines: To reduce the transportation cost, Industries
are located near mines with Iron ore, manganese, limestone,
dolomite deposits. For example, Rourkela in India.
2. Transportation: Location near coastal regions reduces the cost of
transporting raw material (usually imported) from port to
factories. For example, Vishakhapatnam in India.
3. Modern Technology: Such as electric smelters have helped in
shifting of steel industries away from coal and iron-ore reserves
by making efficient use of scrap metal & also reducing energy
requirement. For example, Bhushan steel plant in Ghaziabad.
4. Industrial Inertia: Industries continue to be located in the same
area despite decline of locational advantages e.g. depletion of raw
material. For example, Ruhr in Germany; Pittsburg in the USA.
5. Developmental policies of government for backward regions. For
example, Bhilai and Salem plants in India.
6. Strategic reasons: After WWII, the USA and the USSR adopted
a policy to not allow the concentration of the industry in one
region. Thus, in the USA some plants were setup in the western
region such as California and the USSR in the eastern side
towards Pacific coast.
4. Near forest — Ancient times
 1. Until the end of medieval period, iron production was done on
small scale and energy available was thorough charcoal. To
produce five tons of iron, you had to chop down one acre of forest
to get sufficient charcoal. Therefore, wood supply was primary
factor for deciding location and smelters were usually setup near
forest areas.
2. Even in modern times, Visvesvaraya Iron and Steel plant
(Karnataka) was setup near jungle to get wood charcoal.
5. Near coal fields — Industrial revolution
1. In Britain, iron ore was found embedded with coal seams. So,
same area provided both iron ore and coal. During that era, to
process one ton of iron ore, you needed 8-12 tons of coal. Railway
engines were also inefficient. So, weight-wise, it was cheaper to
transport iron ore to coalfields rather than transporting coal to iron
ore site.
2. Examples
1. Ruhr Valley, Saxony region in Germany.
2. Britain — Lancashire, York shire, South wales.
3. US — Appalachian-Pennsylvania-great lakes.
4. Australia — New South Wales region.
5. China — Wuhan, Anshan, Chongqing.
6. Coastal areas
1. By early 20th century the coal and iron ore mines in US-Europe
started getting depleted. So, they started importing iron ore from
other countries. As a result the iron space and steel industry
started moving toward coastal sites to reduce cost of transporting
ores from port to factory via railways.
2. Examples
1. Steel industry in Osaka-Kobe of Japan.
2. Steel plants at Vishakhapatnam, Ratnagiri, Mangalore in
India.
3. Malaysia has iron ore but not enough coal. Therefore steel
plants located near coastal area to get imported coal at
minimum transport cost.
4. In the coastal cities of Cleveland, Detroit, Chicago in USA.
7. Industrial inertia
1. Today, coal is not the only source of energy. We have natural gas,
 hydel electricity even nuclear power and also thanks to new
technologies in steel production, you don’t need massive amount
of coking coal.
2. Labour: As time progressed, area near coal fields developed into
industrial cities. So, there is already a large pool of skilled and
experienced workers, support services. New area may not have the
same labour supply.
3. Transport: The railroad, transport and communication
infrastructure are well developed in the old area. Therefore, even
if local raw material supply is exhausted, they can be imported
from other areas.
4. Capital: It is usually cheaper to modernise or expand an existing
location rather than move to a new site.
5. Market: Iron and steel industries provide raw material to many
secondary manufacturing industries such as automobile, heavy
engineering etc. It will affect profit levels as they lose important
customers.
6. Government policy: The industrialists in old area usually have
deep pockets and political connections so they lobby to
government for favourable protectionist policies.

Steel industry

1. The industry is one of the most capital intensive industries and is

concentrated in North America, Europe and Asia. Since most of the
coalfields are located in the middle latitudes, iron steel industry
developed in these latitudes.
2. Since steel is the raw material for many secondary industries like
automobiles, important industrial regions of the World usually found at
middle latitudes. On the other hand, tropical belt doesn’t have any
significant coal mines. So, hardly any industrial development.
3. In U.S.A, most of the production comes from the north Appalachian
region, Great Lake region and the Atlantic coast. The industry has also
moved towards the southern state of Alabama. Pittsburg area is now
losing ground. In Europe, U.K., Germany, France, Belgium,
Luxembourg, the Netherlands and Russia are the leading producers.
4. Dominance of Chotanagpur plateau region
 1. Low cost of iron ore is available, since it is mined in this region.
2. This region is in proximity to coal producing states. So cheap raw
material available. Other supplement minerals like manganese,
bauxite and limestone are found in this part of the plateau in
abundance.
3. Cheap, hard and skilled labour is easily available.
4. These industries have sea ports of the Indian peninsula like,
Haldia, Paradip, Vishakhpatnam, Chennai etc., near to them.
5. Inland waterways and good network of roads to serve domestic
market well.

Cotton industry

1. In ancient India, cotton textiles were produced with hand spinning and
handloom weaving techniques. But the production of hand woven
cotton textile was expensive and time consuming. Hence, traditional
cotton textile industry could not face the competition from the new
textile mills of the West, which produced cheap and good quality
fabrics.
2. After 18th century, power looms came into use. In the early years, the
cotton textile industry was concentrated in the cotton growing belt of
Maharashtra and Gujarat. Availability of raw cotton, market, transport
including accessible port facilities, labour, moist climate, etc.
contributed towards its localisation.
3. While spinning continues to be centralised in Maharashtra, Gujarat and
Tamil Nadu, weaving is highly decentralised to provide scope for
incorporating traditional skills and designs of weaving in cotton, silk,
zari, embroidery, etc.
4. India has world class production in spinning, but weaving supplies low
quality of fabric as it cannot use much of the high quality yarn produced
in the country. There are some large and modern factories in weaving,
but most of the production is in fragmented small units, which cater to
the local market. This mismatch is a major drawback for the industry.
5. Cotton is a pure raw material which does not lose weight in the
manufacturing process. So, other factors like, power to drive the looms,
labour, capital or market may determine the location of the industry. At
present the trend is to locate the industry at or close to markets, as it is
the market that decides what kind of cloth is to be produced. Also the
 market for the finished products is extremely variable, therefore, it
becomes important to locate the mills close to the market.
6. After the first mills were set up in Mumbai and Ahmedabad in the
second half of the nineteenth century, the cotton textile industry
expanded very rapidly. The number of units increased dramatically. The
Swadeshi movement gave a major impetus to the industry as there was
a call for boycotting all British made goods in favour of Indian goods.
7. After 1921, with the development of the railway network other cotton
textile centres expanded rapidly. In southern India, mills were set up at
Coimbatore, Madurai and Bangalore. In central India, Nagpur, Indore,
Solapur and Vadodara became cotton textile centres. Cotton textile
mills were set up at Kanpur based on local investment. Mills were also
set up at Kolkata due to its port facilities.
8. The development of hydro electricity also favoured the location of the
cotton textile mills away from the cotton producing areas. The rapid
development of this industry in Tamil Nadu is the result of the abundant
availability of hydel power for the cotton mills.
9. Thus, the cotton textile industry is located in almost every state in India,
where one or more of the locational factors have been favourable. The
importance of raw materials has given way to market or to a cheaper
labour or may be power availability.
10. Factors
1. Cotton as a raw material is lightweight, non-perishable and hardly
any weight loss when converted to textile. Therefore, proximity to
raw material site is not essential, doesn’t offer great cost saving in
transportation.
2. So, other factors such as nearness to market and waterbody,
energy to run power looms and textile machines, cheap labour
supply, availability of capital become more important in industrial
location.
3. In dry climate, the cotton threads will break quickly during
spinning. So, not good for mass production as machines need to
be stopped for joining broken threads.
4. On the other hand in humid climate thread will rarely break. So,
cotton textiles were setup near costal areas (Mumbai, Osaka,
Lancashire). Today we’ve humidifiers that can artificially increase
the air-moisture in factory.
11. Problems of the cotton textile industry
 1.There is shortage of raw material especially of good quality cotton
to meet the growing demand of the Indian textile industry. Cotton
is imported from Egypt, Sudan Kenya, Peru, Tanzania, Uganda,
and USA. There is a need of silver revolution.
2. Most of the Indian textile mills are working with obsolete
machinery. 70 percent of the spindles are more than 30 years of
age. The outdated machinery cannot compete with the machinery
of countries like China, Japan, etc.
3. Power supply to most of the factories is inadequate and erratic
which adversely affects the production of goods.
4. An important factor for the growing sickness of the mill sector is
the growth of the decentralised sector. Being a small scale sector,
the Government allowed excise concessions and other privileges.
These accompanied with low wages have led to low cost of
production in the decentralised sector.
5. The high rate of duty on imported cotton has increased the cost of
production of clothes which has created problems in selling the
cloth in the international market.
6. Competition from synthetic fibres also poses problems to cotton
textile industry. The poor people of the country prefer to use
synthetic fibre clothes which are more durable and attractive.
12. Why Osaka in Japan developed
1. It is an important textile centre of Japan, also known as the
Manchester of Japan. The textile industry developed in Osaka due
to several geographical factors.
2. The extensive plain around Osaka ensured that land was easily
available for the growth of cotton mills.
3. Warm humid climate is well suited to spinning and weaving.
4. The river Yodo provides sufficient water for mills.
5. Availability of cheap labour.
6. Location of port facilitates import of raw cotton and for exporting
textiles. The textile industry at Osaka depends completely upon
imported raw materials. Cotton is imported from Egypt, India,
China and USA.
7. The finished product is mostly exported and has a good market
due to good quality and low price.
8. Though it is one of the important textile cities in the country, of
 late, the cotton textile industry of Osaka has been replaced by
other industries.
13. Why did Gandhi lay emphasis on Khadi
1. To boycott foreign made cloth as a means of protest.
2. To develop a sense of nationalism among the people and develop
khadi as a symbol of national unity and national fight.
3. To give employment to a large number of people who were
unemployed.
4. To promote cloth making as a cottage industry and develop village
industry.
5. Most importantly, it showed Indians how to be self-reliant.

Jute industry
1. India is the largest producer of raw jute and jute goods and stands at second
place as an exporter after Bangladesh. There are about 70 jute mills in India.
Most of these are located in West Bengal, mainly along the banks of the River
Hughli.
2. Hugli basin
1. Proximity of the jute producing areas such in West Bengal and in
Bangladesh.
2. Inexpensive water transport, supported by a good network of railways,
roadways and waterways to facilitate movement of raw material to the mills.
3. There is abundant water for processing raw jute.
4. Availability of cheap labour from West Bengal and adjoining states of
Bihar, Orissa and Uttar Pradesh.
5. Kolkata as a large urban centre provides banking, insurance and port
facilities for export of jute goods.
3. Challenges
1. Wage rates need to be linked with productivity, new sophisticated
machinery needed, but labour unions resistant. So, businessmen not doing
new investment.
2. After partition jute producing areas went to Bangladesh. So Bangladeshis
are now using more modern machineries than while we’re still using outdated
technology. Hence Bangladeshi jute products are better and cheaper than ours
in International market.
3. Competition from synthetic packaging material.
4. Lack of marketing strategy to promote jute as eco-friendly, bio-degradable
packing material among environmentally conscious customers in US and
Europe. However, the internal demand has been on the increase due to the
Government policy of mandatory use of jute packaging.
5. To stimulate demand, the products need to be diversified. In 2005, National
Jute Policy was formulated with the objective of increasing productivity,
improving quality, ensuring good prices to the jute farmers and enhancing the
yield per hectare.

Wool industry
1. Why do Southern Hemisphere lead in Wool production
1. Damper, cooler condition in the temperate areas of the Northern
Hemisphere is not good for wool production. Dry, warm climates of southern
hemisphere provide better conditions for wool production. Ex: Interior
Australia, South Africa and the rain shadow area of Patagonia in Argentina.
2. Australia is a dry continent, so large scale agriculture is not possible
anyways. Sheep can survive in bad climatic conditions. Therefore, sheep
rearing provides the best economic use of the land for the farmers.
3. In Australia, sheep rearing is done on a large scale, so lower cost of
production. This enables wool producers from southern hemisphere to
compete with Indian, European or North American producers despite the
added cost of transporting wool from South to North hemisphere.
4. Australia leads in wool production, but not in finished woollen textiles.
Because, woollen textiles have target audience in colder northern countries
and Australia’s own local market is small. Cost of labour is also high in
Australia because of low population. Woollen textile business require skilled
workers.
2. Wool business in India
1. Wool is non-perishable and lightweight. Indian wool is coarse, so irritates
body. If you want to make decent apparels, you have import from Australia..
Even to produce decent Carpets, blankets, you’ve to mix it with New
Zealand’s wool. Hence location of woollen textile not tied to raw material
site.
2. Winter in North India is brutally cold. So, wool has good demand. 75% of
industries concentrated in Northern States because of market factor. Parallel
to wool market factor, you can see that Cotton textile industry is profound in
southern half of India because warm humid climate. So, more demand for
Cotton garments than woollen.

Chemical Industry
1. The chemical industry is among the established traditional sectors of
our country that plays an integral role in our economic development.
This sector forms a part of the basic goods industry and is a critical
input for industrial and agricultural development. It accounts for about
2.11 percent of GDP. The industry comprises both small scale and large
units.
2. Chemical industry as a driver
1. It supplies raw material to several industries such as iron and steel,
textiles, paper, synthetic fibres, rubber, plastics, paints, soaps,
detergents, fertilisers, pharmaceutical, pesticides and dyestuffs.
2. Chemicals are also used in many industries to improve or preserve
the quality of non-durable and durable goods.
3. Advanced researches like bio-engineering, mutation, artificial
human organ production and genetic-reengineering are made
possible in India, only with the help of the proper chemical
industries. To make pharmaceutical industry more competitive,
we need consistent and quality supply of chemicals.
4. A well developed and competitive chemical industry will lead to
cheaper and better fertilisers, pesticides and seeds to farmers,
enhancing viability of the agriculture sector.
3. Potential
1. The Indian chemical sector accounts for 13-14% of total exports
and 8-9% of total imports of India. Though itself not rich in raw
materials like phosphate and sulphur, India’s proximity to the
Middle East makes for economies of scale.
2. Growing disposable incomes and increasing urbanisation are
fuelling the end consumption demand for paints, textiles,
adhesives and construction, which, in turn, leads to substantial
growth opportunity for chemicals companies.
3. Chemical sector is delicensed except for few hazardous chemicals.
4. India’s growing demand for agriculture related chemicals offers
huge scope of growth for the sector in the future.
5. There is a global demand for Indian chemical products due to their
high quality and competitive pricing. India’s expertise in
developing low cost yet high end chemical products is the key
growth driver for Indian chemical exports.
6. There are good opportunities in segments such as speciality
chemicals, speciality polymers, for catering to huge emerging
 domestic demand as also as a manufacturing hub.
4. Why are inorganic chemical industries spread across country
1. Some chemical industries produce products that are closely
associated with other industries. It is more efficient for these
industries to be located near each other. For example a factory that
produces refrigerants near a factory that produces air conditioners
and refrigerators.
2. Raw material for it are of light weight, so can be easily
transported.
3. Some chemical industries require certain inputs (feedstocks), it is
sometimes more efficient for these to be located close to where
the raw materials are produced or extracted.
4. Some industries are more polluting than others and must be
located far from residential areas, others are not very polluting and
can be located inside cities. There may also be safety issues.
5. A highly profitable plant with a smaller footprint can easily be
located within a city. One that produces products in bulk and
requires a very large land area may be more economical to locate
in a remote area where land is cheap.
5. Why the organic chemical industries are located near oil refineries
1. The organic chemical industries get their raw materials from
byproducts of mineral oil which is processed and refined at oil
refineries therefore these industries are located near oil refineries.
2. Also, organic chemicals cannot be transported over long distance
and need to be consumed urgently.

Cement industry

1. Cement is essential for construction activity. This industry requires

bulky and heavy raw materials like limestone, silica, alumina and
gypsum. Coal and electric power are needed apart from rail
transportation. The industry has strategically located plants in Gujarat
that have suitable access to the market in the Gulf countries.
2. Factors affecting distribution of cement industry
1. Cement industry requires low value but heavy materials and
mainly a raw material oriented industry. On an average 1.5 tonne
of limestone is required to produce one tonne of cement. As the
 northern plains are devoid of the limestone deposits, this region is
devoid of this industry.
2. Along the Vindhyan ranges from eastern Rajasthan to Jharkhand,
there is the abundant supply of quality limestone. As a result,
many factories are found in MP, Chhattisgarh, AP, Rajasthan,
Gujarat, TN, KT and Bihar.
3. The transport cost is also reduced if the manufacturing plant is
located near the market.
4. Some other factors for the growth of this industry include, labour
availability, energy source availability, water availability etc.
5. Thus, availability of raw materials, bulk transport facilities with
least distance to the ready market are three fundamental factors
that favour the growth of cement industry in India.
3. Growth of cement industry in India
1. The first attempt of cement manufacturing was done in Chennai in
1904 where sea shells were used as raw material. But this attempt
failed and successful cement manufacturing began with setting up
of Indian Cement Company plant at Porbandar in 1912-13.
2. The major turning point in the growth of this industry was
witnessed when 10 existing Indian cement companies merged into
one as Associated Cement Co. Ltd. (ACC) in 1924. At the same
time, Dalmiya Cement group was also formed in 1937.
3. After independence with focus on massive building programmes
the demand for cement rose dramatically. Gradually in 1980s,
India achieved self sufficiency in cement production with partial
decontrol of this industry. Subsequently with complete decontrol
of this industry in 1990s and implementation of LPG reforms,
helped this industry to grow exponentially.
4. Concept of mini cement plants is implemented in 1979 to exploit
scattered limestone deposits.
4. Why the cement industry is concentrated in Gujarat
1. Bulky and heavy raw materials like limestone, silica, alumina and
gypsum which are needed for the industry are readily available in
Gujarat.
2. Coal and electric power are needed as source of energy. Gujarat
has suitable access to the market in the Gulf countries for the
export of cement.
Automobile industry

1. Automobile industry requires large variety of raw materials from other

industrial sources namely steel, non-ferrous metals, window glass,
plastic, rubber, wood, paint, textile, electronic cables, seat cushions etc.
Therefore, best location for automobile industry is the established
industrial region that has tradition of manufacturing such components.
2. Traditional large-scale industrial regions: These are based on heavy
industry, often located near coal-fields and engaged in metal smelting,
heavy engineering, chemical manufacture or textile production. These
industries are now known as smokestack industries.
3. Traditional industrial regions can be recognised by
1. High proportion of employment in manufacturing industry. High-
density housing, often of inferior type, and poor services.
Unattractive environment, for example, pollution, waste heaps,
and so on.
2. Problems of unemployment, emigration and derelict land areas
caused by closure of factories because of a worldwide fall in
demand.
4. Advantages in India
1. Raw material such as steel, electricity, tyres are available in India.
Ex: Chennai automobile sector is located near Salem steel plant.
2. India has presence of both cheap skilled as well as unskilled
labour. Ex: Automobile center at Delhi and Mumbai because of
presence of cheap skilled labour.
3. Availability of ports helps in import of machinery part and export
of final product. Ex: Mumbai and Chennai port location make
them favourable position for industry.
4. India has ready market for automobile industry especially metro
cites like Delhi, Mumbai due to factors such as rise in purchasing
power, concerns of safety, Poor public transport, etc.
5. Government policy for 100% FDI through automatic route, testing
labs, tax benefits are boon for the sector.
6. India’s strategic location in Indian ocean with accessibility
towards east Asia as well as Middle east and Africa is boon for
India.
 7. Domestic industry expanded with larger technological
breakthroughs. Ex: Fuel efficient kappa engine by Hyundai.
8. However there are some issues like delay in constructing
dedicated freight corridors, interrupted power supply, increased
bank rate which need to be overcome to further increase growth of
automobile sector and make Indian campaign Make in India great
success.

Rare Earth metals

1. A rare earth element (REE) or rare earth metal is set of seventeen

chemical elements in the periodic table, specifically the fifteen
lanthanides, as well as scandium and yttrium. They occur commonly in
earth’s crust. They are used in many commercial applications including
new energy technologies, electronic devices, automobiles and national
security application.
2. These elements provide reduced weight, reduced emissions, greater
efficiency, durability, and thermal stability to devices. They are used in
illuminated screens of devices, in glass polishing, petroleum refining,
pollution control, as catalysts, and in defence equipments such as
precision weapons and night vision goggles.
3. They are not rare but occur together in small quantities which makes
their extraction difficult and economically unviable. Many of the REEs
are hazardous to extract due to their radioactive nature. Globally China
is the leader in extraction of Rare Earth Elements. Other areas include
Australia, Brazil, Canada, South Africa, Tanzania, Greenland, and the
United States.
4. India has 3% of world reserves. The primate mineral from which they
are extracted is Monazite which is found in the form of sand on beaches
of Kerala. India’s emergence as a supplier, though a small one, has been
a good news for countries like Japan, which up to now have had to rely
mostly on China for rare earths production.

Uranium in India
Software industry

1. Silicon valley refers to the southern portion of the San Francisco Bay
Area, which is located in the US state of California. It is home to many
of the world’s largest high tech corporations, as well as thousands of
startup companies. The core industry of the region is the fabrication
industry, which includes design and development of silicon computer
chips.
2. Factors responsible for the growth of silicon valley
1. Economic factors: The fabrication industry developed here
initially due to economic factors such as cheap availability of
land. This was later aided by availability of large skilled work
force and agglomeration effect.
2. Investors: Availability of large pool of investors in California to
provide seed capital to budding entrepreneurs.
3. Infrastructure: The state has two of the world’s best universities
 like Stanford and University of California.
4. Government policies: State of California has one of the most
business friendly legal atmospheres. It is very easy to set up a new
business there.
5. Weather: Its location near the mountains in tropical regions
makes the weather pleasant and conducive for maximum
productivity.
6. Migration: It also benefited greatly from the migration of
Americans, especially veterans, west to California and into the
new jobs in aerospace and electronics.
3. Why IT is concentrated in Bangalore
1. The seeds for IT have been laid by Patni, Infosys and Texas
instruments setting up their offices in Bangalore.
2. Bangalore has one of of the best climate in the country throughout
the year. It is not too hot in summer, pleasant in winter. So it
naturally attracted companies as well as people to settle over
there.
3. The State government also offered adequate incentives to
investors. In 1970s itself a large chunk of land was kept for IT
industry. The state government of Karnataka was the first to
announce an IT Policy in 1992.
4. Bangalore had highest internet connectivity in India among all
other cities. So, it has guaranteed connectivity to the world at all
the time.
5. Bangalore was always a great education hub. Bangalore has the
largest number of educational institutions and IT colleges in India.
The local population were relatively well read in Bangalore.
Bangalore in 70s and 80s used to attract people from all over the
world for its educational institutions.
6. Bangalore was a highly cosmopolitan area even before it became
the IT capital of the country. Even in the 70s and 80s, one could
speak almost any South Indian language on the streets and people
would respond. The same with Hindi and English too.

Timber industry
1. Geographical industry
1. Raw material: Significant weight loss occurs when logs are
processed. Therefore most pulp mill and saw mills are located
near the jungles to reduce the cost of transporting waste matter.
2. River: As logs are bulky and difficult to transport via road. Rivers
provide cheap and convenient mode of transport. Ex: Myanmar,
the teak logs are floated down the Irrawady river upto Yangon and
then exported. The paper/pulp mills require clean water free from
chemical/pollutants.
2. Canada leads
1. Raw material: It has softwood which is easy to chop. Also, in
coniferous forests, trees of same species are concentrated in one
particular area. So, mass exploitation easier compared to tropical
areas.
2. Transport: During winter, jungle surface is covered with snow.
So, slippery surface provides easier to move logs to rivers. The
forests are less dense than in tropical areas. So, they are easy to
access.
3. Labour: As winter season in Canada is long, agricultural
activities are limited which provide adequate labour for
lumbering. Lumbering is highly mechanised with the help of
chainsaws, bulldozers, etc.
4. Market: These forests are close to economically developed
regions, where demand for wood is higher. Ex: USA for newsprint
paper.
3. Challenges in Tropical areas
1. In tropical areas some tree species are extremely valuable, but
they are not available in single pure strand. Lack of density of the
species increases the cost of gathering.
2. In Amazon and Zaire basin, some trees are so heavy, it is difficult
to float logs. This again increases transportation charges.
3. Settlement is sparse, economies are non-industrialised and are
away from demand areas (Ex: Africa).
4. Road construction is also difficult because of thick vegetation.
5. Because of lax regulations and slash and burn type agriculture,
jungles are permanently destroyed.
4. Opportunities in Temperate areas
 1. Trees of same species are concentrated in a particular area. So, it
is easy to exploit on commercial scale.
2. Frozen ground helps transporting logs from jungle/hills up to
rivers.
3. Softwood, present in temperate areas, is easy to float down the
river streams.
4. Economies of the countries are industrialised and are also near
market.
5. Replantation programs, silviculture, strict government regulation
on lumbering make jungles regenerate faster and lumbering
becomes sustainable.

Pharmaceutical industry

1. In initial years of setting up the Indian Pharma industry was located

mainly at ports as India was largely importing bulk drugs and
processing them further into the drugs for retail in market. Thus the
location of industry was mostly restricted to large cities such as
Mumbai, Kolkata, etc.
2. In recent times as the country has developed skilled work force and also
increased domestic demand has now shifted to the locations near cities
and metropolitan centers. The largest cluster of pharma industry being
setup around cities such as Jaipur, Hyderabad, Pune, Delhi etc. This
industry thus has acquired market orientation in last few years. Even the
emergence of PPP model in pharma industry has helped in the evolution
of pharma industry in the large metropolitan centers.
3. Additionally, Pharma industry has also established a large presence in
the hilly areas of the country because of large incentives which have
been provided to this industry by the respective state governments for
example Uttarakhand and Himachal Pradesh.
4. Popularity of alternative medicine system has also added further
impetus to the shifting of pharma industry towards the hilly regions of
the country. Also, hilly regions provide pollution free environment and
relatively cold climate.
5. Prospects of pharma industry in India
1. India’s population is growing rapidly, as is its economy creating a
large middle-class able to afford modern medicines.
 2. India is one of the largest suppliers of generic drugs in the world
and this sector has large amount of untapped potential globally.
3. India also has a vast pool of trained pharmaceutical scientists,
doctors and researchers.
4. India’s population is ageing, so demand is likely to increase for
drugs for cardiovascular problems, disorders of the central
nervous system and other chronic diseases such as diabetes which
is increasing at an alarming rate.
5. The ascendancy of India’s medical tourism in recent years also
has encouraged a number of international pharmaceutical
companies to invest in India, this has led to large scale
collaboration between Indian and foreign pharmaceutical
companies.
6. Globalisation
1. Access to world markets has increased. Since 1980s, India has
been exporting more medicines than it imports. About 30% of the
drugs meeting the requirements of the US generic market is from
India. Large market share for generic drugs was opened in LDCs
like Africa.
2. Pharma FDI helped to boost the Indian economy and create
gainful employment.
3. FDI also provided better medical techniques, innovations and led
to improved domestic productivity and competitiveness. Merging
with international farmers helped Indian industry.
4. India emerged as a hub of medical tourism ($2 billion) which also
boosted growth prospects of the industry.
5. A recent study shows that the prices of many life saving bulk
drugs have gone up steeply because of the WTO IPR norms.
6. With the reduction of the customs duties on foreign imports many
drugs manufactured in India have become unviable compared to
the foreign goods in the Indian market.
7. Large MNCs have nearly monopolised the vital drug markets
where there is scope for highly funded innovation.
8. Mergers and acquisitions with Indian firms (like SKB with
Sterling) is further increasing the tendency towards
monopolisation.
Petrochemical industry

1. Oil is extracted from the oil fields is in its crude form and contains
many impurities. It is refined in oil refineries before use. After refining
various products such as kerosene, diesel, petrol, lubricants, bitumen
etc., are obtained.
2. Today approximately 22 oil refineries are working in India. Some of
these places where they are located are Guwahati, Barauni, Koyali,
Haldia, Mathura, Digboi, Panipat, Chennai, Mumbai, Kochi, Bina etc.
3. Factors responsible
1. Petroleum refining does not lead to significant weight loss.
Virtually all the by-products can be used. Therefore, refineries can
be set up near the raw material or near the market or at an
intermediate break of the bulk location.
2. After refining, the finished petroleum products can be supplied to
interior areas through pipeline connection and trucks. Ex: Barauni
(Bihar), Mathura (UP), Panipat (Haryana).
3. Many petrochemical complexes are located on the coast to
facilitate imports. Ex: Reliance has setup a pipeline to directly
transport crude oil from Sikka port to its Jamnagar refinery.
4. The development of large tankers and pipelines made bulk
transportation of petroleum possible. This provides favourable
condition for locating refineries and petrochemical industries near
the market and near the ports.
4. Fertiliser industry
1. The localisation of fertilizer industry is closely related to
petrochemicals. About 70% of the fertiliser plants producing
nitrogenous fertilizer use Naphtha as the basic raw material.
2. That is why, most of the fertilizer plants are located near the oil
refineries. For example, oil and gas from Bombay High, the
Gujarat-Maharashtra region got fertiliser plants at Hazira,
Mumbai, Trombay, Vadodara etc.
3. However, some fertilizer plants draw their feed stock from steel
slug as well as coke and lignite. Sulphur is another important
mineral used for manufacturing fertilisers available in Tamil
Nadu.
4. During the recent year transportation of Naphtha or gas through
rail or pipelines has facilitated the widespread distribution of
fertiliser plants with priority to sea board location. Ex: Vijaypur,
Jagdishpur.