Manufacturing Industries

Why this chapter matters for UPSC: Industrial location is one of the most frequently asked GS1 geography themes: why steel plants sit where they do, why cotton textiles decentralised, why sugar mills moved south, how industrial corridors and resource-based manufacturing create jobs, and what IT industries do to cities. This chapter was dropped from NCERT's rationalised edition: the 2026-27 reprint of India: People and Economy has nine chapters and none on manufacturing. BharatNotes keeps it because the syllabus still asks about the location of industries. The general theory (classification of industries, Weber-type location factors, world industrial regions) is in NCERT's Fundamentals of Human Geography, on this site's secondary activities page.

Contemporary hook: India produced 164.9 million tonnes of crude steel in calendar 2025, second only to China (worldsteel), and the Ministry of Steel reports 168.4 Mt for the financial year 2025-26. The Production Linked Incentive schemes in 14 sectors, with an outlay of ₹1.91 lakh crore, had drawn actual investment of over ₹2.40 lakh crore and generated over 14.15 lakh jobs by 31 March 2026. Yet manufacturing employed only 12.1% of India's workers in 2025 (Periodic Labour Force Survey), which is why NCERT's questions about where and why factories locate still matter.

🧠 First Principles — Read This First

An industry locates where its total cost of getting inputs in and products out is lowest. NCERT puts it plainly: it is economical to locate where "cost of production and delivery cost of manufactured goods to consumers are the least", and transport cost depends on the nature of the raw materials and products. Industries using weight-losing raw materials (iron ore and coal, sugarcane, pulp, copper ore) locate near the raw materials, because hauling the lost weight is waste; industries using pure raw materials that do not lose weight (cotton) can locate near markets, labour or power. Power-hungry industries (aluminium, synthetic nitrogen) go to cheap power. That one principle explains the steel crescent of eastern India, the spread of cotton mills, and the sugar belts.

History and policy then bend the pattern. Colonial trade made Mumbai, Kolkata and Chennai the first industrial nodes; railways carried industry inland; partition cut raw materials from mills; and after independence the state placed plants such as Bhilai and Rourkela to develop backward tribal areas. Liberalisation from 1991 removed most licensing and opened the door to private and foreign capital. So for any industry, ask first what its raw material does in processing, then what history and policy added.

PART 1 — Quick Reference

Ways of Classifying Industries (NCERT)

Location Factors (NCERT)

The Integrated Steel Plants (NCERT)

PART 2 — Concepts & Narrative

Types of Industries

Industries provide employment to a large labour force and contribute significantly to national income. NCERT classifies them five ways (table above). Public sector enterprises are government-controlled companies or corporations; industries of strategic and national importance are usually in the public sector. NCERT also asks about footloose industries: those not tied to any particular raw material location, so other factors decide where they go.

The Iron and Steel Industry

Iron and steel opened the door to rapid industrial development: almost every sector depends on it, down to farm tools. Besides iron ore and coking coal, it needs limestone, dolomite, manganese and fire clay, all gross, weight-losing materials, so the best location is near the raw materials. India has a crescent-shaped region across parts of Chhattisgarh, northern Odisha, Jharkhand and western West Bengal that is extremely rich in high-grade iron ore, good coking coal and the other inputs. The industry consists of large integrated plants, mini steel mills, secondary producers, rolling mills and ancillary industries.

The early integrated plants.

• TISCO (Jamshedpur) lies close to the Mumbai-Kolkata railway, about 240 km from Kolkata, the nearest port for exports. The Subarnarekha and Kharkai rivers supply water; iron ore comes from Noamundi and Badam Pahar, coal from Joda (Odisha), and coking coal from Jharia and West Bokaro.
• IISCO set up its first factory at Hirapur and later one at Kulti; in 1937 the Steel Corporation of Bengal, with IISCO, set up a unit at Burnpur. All three are close to the Damodar valley coalfields (Raniganj, Jharia, Ramgarh), take ore from Singhbhum and water from the Barakar, and lie along the Kolkata-Asansol railway. Production fell in 1972-73 and the government took the plants over.
• Visvesvaraya Iron and Steel Works (VISL), first the Mysore Iron and Steel Works, at Bhadravati, near the iron ore of Kemmangundi in the Baba Budan hills, with local limestone and manganese but no coal. It used charcoal from local forests until 1951, then electric furnaces on hydroelectricity from the Jog Falls project; the Bhadravati river supplies water. It makes specialised steels and alloys.

The Second Plan plants. During the Second Five Year Plan (1956-61) three integrated plants were set up with foreign collaboration under Hindustan Steel Limited; SAIL was created in 1973 to manage them.

• Rourkela (Sundargarh, Odisha), set up in 1959 with Germany, located near raw materials: coal from Jharia, ore from Sundargarh and Kendujhar, power from Hirakud, water from the Koel and Sankh.
• Bhilai (Durg, Chhattisgarh), with Russian collaboration, producing from 1959: ore from Dalli-Rajhara, coal from Korba and Kargali, water from the Tandula dam and power from the Korba thermal station; on the Kolkata-Mumbai rail route; much of its steel goes to the Hindustan Shipyard at Visakhapatnam.
• Durgapur (West Bengal), with the United Kingdom, producing from 1962: in the Raniganj-Jharia coal belt, ore from Noamundi, on the Kolkata-Delhi route, with water and hydel power from the Damodar Valley Corporation.
• Bokaro, set up in 1964 with Russian collaboration on the principle of transport cost minimisation: the Bokaro-Rourkela combine sends ore from the Rourkela region to Bokaro, and the wagons return with coal to Rourkela; other materials come from within about 350 km; DVC supplies water and power.

Later plants, set up from the Fourth Plan away from the main raw materials, are in the south: Vizag Steel Plant (Visakhapatnam), the first port-based plant, operating from 1992; Vijayanagar at Hosapete (Karnataka), built with indigenous technology on local ore and limestone; and Salem (Tamil Nadu), commissioned in 1982. More than 206 other units, mostly using scrap in electric furnaces, operate across the country (NCERT).

The Cotton Textile Industry

Cotton textiles are among India's traditional industries: in ancient and medieval times a cottage industry famous for muslin, calicos and chintz. Three factors favoured it: a tropical climate in which cotton is the most comfortable fabric, large cotton crops, and abundant skilled labour that passed skills down generations. The British at first exported raw cotton to Manchester and Liverpool and sold the cheaper mill cloth back in India.

The first modern cotton mill was set up in Mumbai in 1854. Mumbai was close to the cotton of Gujarat and Maharashtra, raw cotton was already brought to its port for export, it was the financial centre with capital, it attracted cheap and abundant labour, and machinery could be imported directly from England. The Shahpur and Calico mills followed in Ahmedabad. By 1947 there were 423 mills, but partition left India with 409 mills and only 29% of the cotton-growing area, causing a major recession. The Swadeshi movement, calling for a boycott of British goods, had given the industry a major impetus; after 1921 railways spread mills to Coimbatore, Madurai and Bengaluru in the south, Nagpur, Indore, Solapur and Vadodara in the centre, Kanpur (local investment) and Kolkata (port). Hydro-electricity favoured mills away from cotton areas (the rapid growth in Tamil Nadu came from abundant hydel power), and lower labour costs drew mills to Ujjain, Bharuch, Agra, Hathras, Coimbatore and Tirunelveli.

The industry has an organised (mill) sector and a decentralised sector of handlooms (including khadi) and powerlooms. The organised sector's share of production fell from 81% in the mid-twentieth century to about 6% in 2000, and powerlooms now produce more than handlooms. Cotton is a pure raw material that does not lose weight, so power, labour, capital or the market decide location, and the trend is towards markets, which decide what cloth is made. The major centres today are Ahmedabad, Bhiwandi, Solapur, Kolhapur, Nagpur, Indore and Ujjain; Maharashtra, Gujarat and Tamil Nadu lead, followed by West Bengal, Uttar Pradesh, Karnataka and Punjab. Tamil Nadu has the most mills, mostly spinning yarn, with Coimbatore holding nearly half; Karnataka's are in the north-eastern cotton areas (Davangere, Hubballi, Ballari, Mysuru, Bengaluru); Telangana's spinning mills are at Hyderabad, Secunderabad and Warangal; Kanpur is the largest centre in Uttar Pradesh; West Bengal's mills are in the Hugli region (Howrah, Serampore, Kolkata, Shyamnagar). Cloth production rose almost five times after independence, against stiff competition from synthetics.

The Sugar Industry

Sugar is the second most important agro-based industry, employing more than 4 lakh people directly and many farmers indirectly; it also yields khandsari and gur. It is seasonal, because cane is. Modern sugar milling began in 1903 in Bihar; there were 139 factories in 1950-51 and 662 in 2010-11. Sugarcane is weight-losing: sugar is only 9 to 12% of cane, sucrose begins to dry during haulage, and the best recovery needs crushing within 24 hours of harvest, so mills are located in the cane-growing regions.

Maharashtra is the leading producer, with more than one-third of India's sugar; Uttar Pradesh is second, with mills in two belts: the Ganga-Yamuna doab (Saharanpur, Muzaffarnagar, Meerut, Ghaziabad, Baghpat, Bulandshahr) and the tarai (Kheri Lakhimpur, Basti, Gonda, Gorakhpur, Bahraich). Other areas: Tamil Nadu (Coimbatore, Vellore, Tiruvannamalai, Villupuram, Tiruchirappalli), Karnataka (Belagavi, Ballari, Mandya, Shivamogga, Vijayapura, Chitradurga), coastal Andhra Pradesh and Telangana, and Bihar, Punjab, Haryana, Madhya Pradesh and Gujarat.

NCERT's sugar section says India is "the largest producer of both sugarcane and cane sugar"; its own chapter on agriculture puts India second in sugarcane after Brazil (2018), and FAO's 2024 figures agree (Brazil 760 Mt, India 453 Mt).

Petrochemical Industries

Petrochemicals grew fast after demand for organic chemicals outran supply in the 1960s and refining expanded. They fall into four sub-groups: polymers, synthetic fibres, elastomers and surfactant intermediates. Mumbai is the hub; cracker units are at Auraiya (Uttar Pradesh), Jamnagar, Gandhinagar and Hazira (Gujarat), Nagothane and Ratnagiri (Maharashtra), Haldia and Visakhapatnam. Three organisations under the Department of Chemicals and Petrochemicals: the Indian Petrochemical Corporation Limited (IPCL); Petrofils Cooperative Limited, a joint venture of the government and weavers' cooperatives making polyester filament yarn and nylon chips at Vadodara and Naldhari; and the Central Institute of Plastic Engineering and Technology (CIPET), for training.

Polymers come from ethylene and propylene, by-products of refining; polyethylene is a widely used thermoplastic. NOCIL, set up in the private sector in 1961, started the first naphtha-based chemical industry in Mumbai; Mumbai, Barauni, Mettur, Pimpri and Rishra are the main producers of plastic materials. About 75% of units are small-scale, and recycled plastic is about 30% of output. Synthetic fibres (nylon and polyester) are made at Kota, Pimpri, Mumbai, Modinagar, Pune, Ujjain, Nagpur and Udhna; acrylic staple fibre at Kota and Vadodara. NCERT warns that non-biodegradable plastic has become "the greatest threat to our environment", and that its use is being discouraged.

Knowledge-Based Industries

The information technology revolution opened new possibilities of economic and social transformation. IT and IT-enabled services (BPO) grew robustly, the software industry surpassed electronic hardware production, the government created software technology parks, many Indian firms won international quality certification, and most multinational IT companies set up software or research centres in India. NCERT notes the large effect on employment. NASSCOM estimated the technology industry's revenue at about US$ 315 billion in 2025-26, with exports of about US$ 246 billion.

Liberalisation, Privatisation, Globalisation (LPG) and Industry

The New Industrial Policy of 1991 aimed to build on past gains, correct distortions, sustain growth in productivity and employment, and attain international competitiveness. Its measures: abolition of industrial licensing, free entry of foreign technology, a foreign investment policy, access to capital markets, open trade, abolition of the phased manufacturing programme, and a liberalised industrial location programme. Licensing was abolished for all but six industries related to security, strategic or environmental concerns; industries reserved for the public sector since 1956 were cut from 17 to 4, with atomic energy and railways remaining public. Shares of public enterprises were to be offered to financial institutions, the public and workers; asset thresholds were scrapped. FDI was seen as a supplement to domestic investment, with an automatic route; industries were discouraged in or very close to large cities for environmental reasons; mining, telecommunications and highways were opened to private firms. Yet, NCERT says, FDI fell short of expectations, with a big gap between approved and actual investment, much of it going to domestic appliances, finance, services, electronics and food.

Globalisation, NCERT's definition, means integrating the national economy with the world economy, so that goods, services, capital, labour and resources move freely. For India it meant opening to FDI, removing obstacles to multinationals, allowing Indian firms to collaborate and set up joint ventures abroad, shifting from quantitative restrictions to tariffs and lowering duties, and using exchange rate adjustment rather than export incentives.

Industrial Regions of India

Industries cluster where locational factors favour them; the indices used to identify clusters include the number of units and of industrial workers, power used, output and value added. NCERT identifies 8 major industrial regions, 13 minor industrial regions and 15 industrial districts.

• Mumbai-Pune: Mumbai-Thane to Pune, Nashik and Solapur, spreading to Kolaba, Ahmednagar, Satara, Sangli and Jalgaon. It began with cotton textiles (cotton hinterland, moist climate); the Suez Canal (1869) boosted Mumbai port, hydroelectricity from the Western Ghats powered mills, and chemicals followed, then Mumbai High oil and nuclear plants, refining, petrochemicals, engineering, drugs, fertilisers, shipbuilding, electronics, software and transport equipment.
• Hugli: about 100 km along the Hugli from Bansberia to Birlanagar, with Kolkata-Haora as the nucleus. It grew with the river port, railways, tea in Assam and north Bengal, indigo and later jute, Damodar coal and Chotanagpur ore, and cheap labour from Bihar, eastern Uttar Pradesh and Odisha; Kolkata was the capital of British India (1773-1911). The first jute mill at Rishra in 1855 began modern clustering; partition hurt it, and the decline of jute has slowed it. Landmarks: Hindustan Motors at Konnagar, the locomotive factory at Chittaranjan, the refinery at Haldia.
• Bengaluru-Tamil Nadu: the fastest-growing region after independence, now spread over almost all of Tamil Nadu; away from coal, it depends on the Pykara hydroelectric plant (1932). Cotton textiles came first, then heavy engineering at Bengaluru (HAL, machine tools, HTL, Bharat Electronics), the Chennai refinery, the Salem steel plant and fertilisers.
• Gujarat: nucleus between Ahmedabad and Vadodara, extending to Valsad, Surat and Jamnagar. Cotton textiles from the 1860s, with the double advantage of raw material and market; oil discoveries brought petrochemicals around Ankleshwar, Vadodara and Jamnagar; Kandla port and the Koyali refinery helped; NCERT notes the largest petroleum refinery at Jamnagar.
• Chotanagpur: Jharkhand, northern Odisha and western West Bengal; heavy metallurgy on Damodar coal and the minerals of Jharkhand and Odisha, with large plants at Jamshedpur, Burnpur-Kulti, Durgapur, Bokaro and Rourkela, Damodar valley power, cheap labour and the Hugli market.
• Visakhapatnam-Guntur: from Visakhapatnam to Kurnool and Prakasam, based on the Visakhapatnam and Machilipatnam ports, agriculture, minerals and Godavari coal; shipbuilding at Visakhapatnam from 1941, a refinery on imported oil, a lead-zinc smelter in Guntur, and the Vizag steel plant using Bailadila ore.
• Gurugram-Delhi-Meerut: far from minerals and power, so light, market-oriented industries: electronics, light engineering, electrical goods, textiles, sugar, machine tools, tractors and software; the Agra-Mathura area specialises in glass, leather and (Mathura) petrochemicals.
• Kollam-Thiruvananthapuram: plantations, agriculture and hydropower; far from minerals, so agro-processing and light industries (cotton textiles, sugar, rubber, matchbox, glass, fertiliser, fish, coir, aluminium, cement), with new industries around the Kochi refinery.

PART 3 — UPSC Integration

Frames that score. For any location question, classify the raw material (weight-losing or pure), then add power, market, labour, transport, history and policy with NCERT's example for each. For "steel away from raw materials", use Vizag (port-based, 1992) and the newer southern plants against NCERT's crescent. For cotton decentralisation, use partition (409 mills, 29% of cotton area), hydel power in Tamil Nadu, cheap labour centres and the shift to markets. For sugar moving south, use the 24-hour crushing rule and Maharashtra's lead.

Exam Strategy

For Prelims: plant-collaboration pairs (Rourkela-Germany, Bhilai-Russia, Durgapur-UK, Bokaro-Russia); raw-material sources (Dalli-Rajhara for Bhilai; Noamundi and Badam Pahar for TISCO; Kemmangundi for VISL); Jog Falls (VISL power); first cotton mill Mumbai 1854; first jute mill Rishra 1855; sugar's 9-12% recovery and 24-hour rule; NOCIL 1961; the 8 major industrial regions and their nuclei.

For Mains: location theory with Indian examples, then policy (1991, PLI, SEZs) with dated figures.

Avoid: NCERT's claim that India is the largest sugarcane producer (Brazil is); mixing calendar-year (worldsteel 164.9 Mt) and financial-year (Ministry of Steel 168.4 Mt) steel figures.

Practice Questions

Practice (UPSC-pattern, not past papers). Questions 1 to 5 are NCERT's own exercise MCQs.

Prelims:

1. Which is NOT a factor of industrial location?
   (a) Market
   (b) Capital
   (c) Population density
   (d) Power

2. The earliest iron and steel company to be established in India was:
   (a) IISCO
   (b) TISCO
   (c) Visvesvaraya Iron and Steel Works
   (d) Mysore Iron and Steel Works

3. The first modern cotton mill was established in Mumbai because:
   (a) Mumbai is a port
   (b) it is located near a cotton-growing area
   (c) Mumbai was the financial centre
   (d) All of the above

4. The nucleus of the Hugli industrial region is:
   (a) Kolkata-Haora
   (b) Kolkata-Rishra
   (c) Kolkata-Medinipur
   (d) Kolkata-Konnagar

5. Which one of the following is the second largest producer of sugar (NCERT)?
   (a) Maharashtra
   (b) Uttar Pradesh
   (c) Punjab
   (d) Tamil Nadu

6. Consider the following pairs of a steel plant and its foreign collaborator (NCERT):
   

   1. Rourkela : Germany
      
   2. Bhilai : Russia
      
   3. Durgapur : United Kingdom
      How many of the pairs given above are correctly matched?
      (a) Only one
      (b) Only two
      (c) All three
      (d) None

Answer notes: Q2 and Q3 follow NCERT's keys; Q5, Maharashtra produces more than one-third of India's sugar and Uttar Pradesh is second.

Mains:

1. Account for the present location of iron and steel plants away from the sources of raw material, with Indian examples. (250 words)
2. Discuss the factors responsible for the decentralisation of the cotton textile industry in India. (150 words)
3. What do you understand by liberalisation, privatisation and globalisation? How have they affected industrial development in India? (250 words)

📦 Revision Capsule

Sources

• NCERT, India: People and Economy (Class XII), ch. 8 "Manufacturing Industries" (2021-22 print; not in the 2026-27 reprint): 2021 book archive, Wayback copy.
• worldsteel, "December 2025 crude steel production and 2025 global crude steel production" (January 2026): worldsteel.org; PIB, "India's Steel Sector Advances Towards Self-Reliance", 5 May 2026: pib.gov.in.
• PIB (Ministry of Commerce and Industry), PLI schemes, 21 July 2026: pib.gov.in; Department of Commerce, Fact Sheet on Special Economic Zones as on 31 March 2026: sezindia.gov.in PDF.
• Ministry of Statistics and Programme Implementation, Periodic Labour Force Survey, annual report 2025: PIB release.
• NASSCOM, Strategic Review 2026, executive summary: nasscom.in PDF.
• FAO, FAOSTAT, Crops and livestock products (sugar cane production, 2024): bulk download.