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1. Sample Essay on Important factors affecting the
location of industries in India
In 2013, India had a nominal GDP of $1.87 trillion and was ranked
10th
largest economy in the world. 26% of India’s GDP comes from its
vibrant industrial sector. The main industries which have contributed to
India’s rapid economic growth in the past decade include:
 Engineering
 Textile industry
 Petroleum and chemical production
 Pharmaceuticals
 Mining
Many investors, both local and foreign are rushing to India to set up
industrial firms. There are several factors that affect the location of
industries in India and these are what the investors look at before
setting up their businesses.
 Availability of raw materials. Different industries require diverse
raw materials. The availability of certain raw materials in some
parts of India has led to the influx of industries that use these raw
materials in these areas. For instance, sugar production industries
have been set up in areas where there is large production of
sugarcane. Additionally, the leather industry has thrived more in
areas known for cattle, buffalo, goat and sheep farming. The raw
materials therefore determine industrial locations. Textile
industries are also located in areas that produce most cotton.
 Supply of labour. Whilst a few of the industrial firms may be
capital intensive, most are labour intensive. In India the supply of
cheap labour has been a huge influence in the location of
industries. Most of the industries require many workers to run
efficiently. Even though it has been argued that setting up firms

2. can attract laborers from outside a location, many firms prefer to
start industries in areas with constant supply of cost effective
labor. Some provinces in India have fewer industries because of
poor supply of labor and unproductive workforces.
 Market access. The proximity of the industries to the required
markets has also influenced the location of industries. Most of the
industries have been set up nearer the markets so as to ease
distribution of goods and products. This is why some of the
industries are closer to the cities because this is where the
consumers are.
 Transport and distribution facilities. The availability of good road,
rail and air networks has been a major factor in the location of
industries in India. Most investors prefer to set shop in areas that
are well connected. This makes it easier for them to distribute the
manufactured products to their clients and markets.
 Power supply. Power supply greatly influences the location of
industries in India because production is heavily dependent on
power. Areas where power supply is erratic have fewer industries
because this affects the cost of production and also slows down
production rates. Most investors in India therefore tend to choose
areas that have reliable supply of power.
 Financial factors. Areas with easy access to financial help in India
tend to have more industries. Cities such as Bombay developed
economically and industrially because many rich people were
lending out capital to those who had viable industrial and
economic ventures. Furthermore, the government has given out
tax incentives to the investors setting up industries in remote
parts of India in order to encourage more industrial investment in
such areas.
 Environmental and climatic factors. There are certain industries
which rely on climatic and environmental conditions to thrive.
Such is the textile industry in India. The textile industries are set
up in humid climates where cotton grows well.

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