Factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India)

Industry/”>Indian Industry : An introduction

Industry accounts for 26% of GDP and employs 22% of the total workforce. According to the World Bank, India’s industrial manufacturing GDP output in 2015 was 6th largest in the world on current US dollar basis ($559 billion), and 9th largest on Inflation-adjusted constant 2005 US dollar basis ($197.1 billion). The Industrial Sector underwent significant changes due to the 1991 Economic Reforms, which removed import restrictions, brought in foreign competition, led to the privatisation of certain government-owned public-sector industries, liberalised the Investment/”>Foreign Direct Investment (FDI) regime, improved Infrastructure-2/”>INFRASTRUCTURE and led to an expansion in the production of fast-moving consumer goods. Post-liberalisation, the Indian private sector was faced with increasing domestic and foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, and relying on cheap labour and new technology. However, this has also reduced EMPLOYMENT generation, even among smaller manufacturers who previously relied on labour-intensive processes.

Electricity sector

Primary energy consumption of India is the third-largest after China and the US with 5.3% global share in the year 2015. Coal and crude oil together account for 85% of the primary energy consumption of India. India’s oil reserves meet 25% of the country’s domestic oil demand. As of April 2015, India’s total proven crude oil reserves are 763.476 million metric tons, while gas reserves stood at 1,490 billion cubic metres (53 trillion cubic feet). Oil and natural gas fields are located offshore at Bombay High, Krishna Godavari Basin and the Cauvery Delta, and onshore mainly in the states of Assam, Gujarat and Rajasthan. India is the fourth-largest consumer of oil and net oil imports were nearly ₹820,000 crore (US$110 billion) in 2014–15, which had an adverse effect on the country’s Current Account deficit. The petroleum industry in India mostly consists of public sector companies such as Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL). There are some major private Indian companies in the oil sector such as Reliance Industries Limited (RIL) which operates the world’s largest oil refining complex.

Engineering

Engineering is the largest sub-sector of India’s industrial sector, by GDP, and the third-largest by exports. It includes transport equipment, machine tools, Capital Goods, transformers, switchgears, furnaces, and cast and forged parts for turbines, automobiles and railways. The industry employs about four million workers. On a value-added basis, India’s engineering subsector exported $67 billion worth of engineering goods in the 2013–14 fiscal year, and served part of the domestic demand for engineering goods.

The engineering industry of India includes its growing car, motorcycle and scooters industry, and productivity machinery such as tractors. India manufactured and assembled about 18 million passenger and utility vehicles in 2011, of which 2.3 million were exported. India is the largest producer and the largest market for tractors, accounting for 29% of global tractor production in 2013 India is the 12th-largest producer and 7th-largest consumer of machine tools.

Defence industry

The Defence industry of India is a strategically important sector in India. With strength of over 1.39 million active personnel, it is world’s 2nd largest military force and has the world’s largest volunteer army. The total budget sanctioned for the Indian military for the financial year 2018 is $62.8 billion, about five times what it spends on Education and welfare. Despite having a modest internal defence industry, India is the largest arms importer in the world, with most of its arms purchases coming in from Russia. 12% of worldwide arms exports (by value) reach India.

Gems and jewellery

India is one of the largest centres for polishing diamonds and gems and manufacturing jewellery; it is also one of the two largest consumers of gold. After crude oil and petroleum products, the export and import of gold, precious metals, precious stones, gems and jewellery accounts for the largest portion of India’s global trade. The industry contributes about 7% of India’s GDP, employs millions, and is a major source of its foreign-exchange earnings. The gems and jewellery industry created $60 billion in economic output on value-added basis in 2017, and is projected to grow to $110 billion by 2022.

The gems and jewellery industry has been economically active in India for several thousand years. Until the 18th century, India was the only major reliable source of diamonds. Now, South Africa and Australia are the major sources of diamonds and precious metals, but along with Antwerp, New York, and Ramat Gan, Indian cities such as Surat and Mumbai are the hubs of world’s jewellery polishing, cutting, precision finishing, supply and trade. Unlike other centres, the gems and jewellery industry in India is primarily artisan-driven; the sector is manual, highly fragmented, and almost entirely served by family-owned operations.

Petroleum products and Chemicals

Petroleum products and chemicals are a major contributor to India’s industrial GDP, and together they contribute over 34% of its export earnings. India hosts many oil refinery and petrochemical operations, including the world’s largest refinery complex in Jamnagar that processes 1.24 million barrels of crude per day. By volume, the Indian chemical industry was the third-largest producer in Asia, and contributed 5% of the country’s GDP. India is one of the five-largest producers of agrochemicals, polymers and plastics, dyes and various organic and inorganic chemicals. Despite being a large producer and exporter, India is a net importer of chemicals due to domestic demands. The chemicals manufacturing industry contributed $141 billion (6% of GDP) and employed 17.33 million people (4% of the workforce) in 2016.

Pharmaceuticals

The Indian pharmaceutical industry has grown in recent years to become a major manufacturer of Health care products to the world. India produced about 8% of the global pharmaceutical supply in 2011 by value, including over 60,000 generic brands of medicines.The industry grew from $6 billion in 2005 to $36.7 billion in 2016, a compound annual Growth rate (CAGR) of 17.46%. It is expected to grow at a CAGR of 15.92% to reach $55 billion in 2020. India is expected to become the sixth-largest pharmaceutical market in the world by 2020. It is one of the fastest-growing industrial sub-sectors and a significant contributor of India’s export earnings. The state of Gujarat has become a hub for the manufacture and export of pharmaceuticals and active pharmaceutical ingredients (APIs).

Textile

The textile and apparel market in India was estimated to be $108.5 billion in 2015. It is expected to reach a size of $226 billion by 2023. The industry employees over 35 million people. By value, the textile industry accounts for 7% of India’s industrial, 2% of GDP and 15% of the country’s export earnings. India exported $ 39.2 billion worth of textiles in the 2017-18 fiscal year. India’s textile industry has transformed in recent years from a declining sector to a rapidly developing one. After freeing the industry in 2004–2005 from a number of limitations, primarily financial, the government permitted massive investment inflows, both domestic and foreign. From 2004 to 2008, total investment into the textile sector increased by 27 billion dollars. Ludhiana produces 90% of woollens in India and is known as the Manchester of India. Tirupur has gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. Expanding textile centres such as Ichalkaranji enjoy one of the highest per-capita incomes in the country. India’s Cotton farms, fibre and textile industry provides employment to 45 million people in India, including some Child Labour (1%). The sector is estimated to employ around 400,000 children under the age of 18.

[su_heading size=”21″]Types of Industries[/su_heading]

Based on the value addition and tangibility broadly we can have three types of industries – primary industries,secondary industries and tertiary industries.

Primary industries are usually very simple industries involving processing of raw materials to give input goods for secondary industries.
Here value addition is usually minimal and they are
usually material oriented.Scale of operation may be small or may be very large.Examples are: coal mining and washing, oil-refining,flour milling, Metal smelting, stone crushing, etc.
Secondary industries are very complex and diversified which took input from primary industries and add significant value to it in different processing stages.
The value additions are so significant that they may have a locational preference in favour of market.Secondary industries may again divided into heavy industries, Light industries, footloose industries, etc.

a) Heavy industries are identified by nature of their bulkyproduct or very high capital inputs or units which mayhave high capacity to influence Environment adversely.Examples are: heavy chemical, heavy machinery,locomotive, shipbuilding, heavy electrical, etc.
b) Light industries are less capital intensive and moreinclined to consumer products.
Products are usually lighter in weight, require lesspower, less polluting and can be established in small areas.
c) Footloose industries are those industries which nearly remain indifferent with locational aspects of plant.Their products are having very high value addition and smaller in size and so transportation cost is only a small fraction of total cost.These industries usually requires a very small production space, are usually less polluting and butrequires highly skilled workers.Examples are: watch, camera, diamond cutting,precision electronics, etc.

Tertiary industries are not related to production process.They are basically trade and Services providing industries.The scale of operation is so large that it is regarded as an industry.Examples are: Banking industry, insurance industry, consultancy industry, etc.

[su_heading size=”21″]Factors of industrial location[/su_heading]

The factors affecting the location of industries are :-

the availability of raw material,
the availability of land,
the availability of water,
the availability of labour,
the availability and consistency of power supply,
the availability of capital,
the availability of transport Network and market.
Sometimes, the government provides incentives like subsidised power, lower transport cost and other infrastructure so that industries may be located in backward areas.

[su_heading size=”21″]Distribution and changing pattern of iron and steel industry[/su_heading]

Although iron and steel manufacturing activity in India is very old, modern iron and steel industry started with the establishment of ‘Bengal Iron and Steel Works’ at Kulti in West Bengal in 1817. Tata Iron and Steel company was established at Jamshedpur in 1907. This was followed by ‘Indian Iron and Steel plant’ at Burnpur in 1919. All the three Plants were established in the private sector. The first public sector iron and steel plant, which is now known as ‘Visvesvarayya Iron and Steel works’, was established at Bhadrawati in 1923.

After independence a great focus was given for self dependence and investments were made in heavy industries. Three new integrated steel plants were established at Rourkela, Bhilai and Durgapur. Bokaro steel plant was established under public sector in 1964. Bokaro and Bhilai plants were set up with the collaboration of the former Soviet Union. Durgapur steel plant was set up in Collaboration with United Kingdom while Rourkela plant was established with the help of Germany.

The change in the spatial pattern of this industry is linked to the change in patterns of consumption, production and exchange of goods and services. This is dependent on the spatial organization and location of economic, transportation and Communication-systems/”>Communication systems that produce and facilitate the trade of the concerned commodities.

[su_heading size=”21″]Distribution and changing pattern of Cotton textile industry[/su_heading]

The industrial development in India began with the establishment of first successful modern cotton textile mill at Mumbai in 1854.Traditional cotton textile industry could not face the competition from the new textile mills of the West, which produced cheap and good quality fabrics through mechanized industrial units. Majority of cotton textile mills are still located in the cotton growing areas of the great plains and peninsular India.

The Muslins of Dhaka, Chintzes of Masulipatnam, Calicos of Calicut and Gold-wrought cotton of Burhanpur, Surat and Vadodara were known worldwide for their quality and design. 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 through mechanized industrial units.

[su_heading size=”21″]Distribution and changing pattern of Sugar industry[/su_heading]

India is the second largest producer of sugar in the world after Brazil and is also the largest consumer. Today Indian sugar industry’s annual output is worth approximately Rs.80,000 crores.Most of the sugar mills are concentrated in six states, namely Uttar Pradesh, Bihar, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh.

Over the period, sugarcane industry is gradually shifting from north Indian states to states in Peninsular India. Some of the important reasons are as follows:

1) The production of sugarcane per hectare is higher is Peninsular India. In fact, sugarcane crop grows well in the tropical Climate of south India.

2) The sucrose contents is higher in the tropical variety of sugarcane grown in the south.

3) The crushing season in south India is longer than in north India.

4) In south India most of the mills have modern machinery.

5) Most of the mills in Peninsular India are in cooperative sector, where profit maximization is not the sole objective

[su_heading size=”21″]Distribution and changing pattern of Petro- chemicals industry[/su_heading]

Petro-chemicals are derived from petroleum or natural gas.Products such as Toothbrushes, toothpaste, combs, hairpins, soap cases, plastic mugs, garments, radiocaes, ball point pens, detergents, electric switches, lipstick, insecticides, bags, bed covers, and foam are some of the goods made from petro-chemicals. The share of offshore crude oil production was about 50.2%. The remaining crude oil production was from 6 States viz., Andhra Pradesh (0.7%), Arunachal Pradesh (0.2%), Assam (12.1%), Gujarat (12.5%), Rajasthan (23.7%) and Tamil Nadu (0.6%).

Besides Vadodara, Gandhar, and Hazira in Gujarat and Nagathone in Maharashtra are other important centres of petro-chemical industry. India is self sufficient in the production of petrochemicals.

[su_heading size=”21″]Weber’s theory of industrial location-its relevance in the modern world.[/su_heading]

Weber’s main point was that the cost of transport (another theory on this) determined the location of industry. Therefore, he uses Von Thunen’s idea (that the cost of transport determines crop selection) and applies it to industry. Similar to Von Thunen, the weight of the raw materials and the weight of the end product (this difference is known as the material index) will determine the site of production depending upon how much the industry is willing to pay to get its product to the market (connecting to Christaller’s ideas of market area). Weber’s theory rest primarily on four such sites, what he calls industrial orientations

Material orientation
Labor orientation
Transport orientation
Market orientation

He analyzed the factors that determine the location of industry and classified these factors into two divisions. These are:

(i) Primary causes of regional distribution of industry (regional factors)

(ii) Secondary causes (agglomerative and deglomerative factors) that are responsible for redistribution of industry.

The three locational factors explained by weber in his theory of industrial location are:-

Transport cost
labour cost
agglomeration economies

Weber uses the location triangle within which the optimal is located based on the three locational factors.

The location of industries is influenced by a number of factors, including natural Resources, labor, capital, transportation, government policy, markets, and competition. In India, the location of industries is also influenced by infrastructure, regulations, Corruption, skills, and land prices.

Natural Resources are essential for many industries, such as agriculture, mining, and manufacturing. Industries that require access to natural resources are often located near those resources. For example, oil refineries are often located near oil fields, and iron and steel mills are often located near coal deposits.

Labor is another important factor in the location of industries. Industries need to have access to a pool of workers with the skills and experience they need. Industries often locate in areas with a large Population of skilled workers. For example, the technology industry is concentrated in Silicon Valley, California, because of the large number of skilled engineers and scientists in the area.

Capital is also essential for industries. Industries need Money to build factories, purchase equipment, and market their products. Areas with a strong financial sector, such as New York City, are often home to many industries.

Transportation is another important factor in the location of industries. Industries need to be able to transport their goods to market. Areas with good transportation infrastructure, such as Ports and Airports, are often attractive to industries.

Government policy can also influence the location of industries. Governments may offer tax breaks or other incentives to businesses that locate in certain areas. For example, the Chinese government has offered tax breaks and other incentives to businesses that have located in special economic zones.

Markets are also important for industries. Industries need to be located near their markets. For example, clothing manufacturers often locate near major population centers, where there is a large demand for their products.

Competition is another factor that influences the location of industries. Industries need to be located in areas where they can compete effectively. For example, many manufacturing industries have moved to developing countries in recent years, where labor costs are lower.

In India, the location of industries is influenced by many of the same factors that are important in other parts of the world. However, there are also some unique factors that influence the location of industries in India, such as:

Infrastructure: India’s infrastructure is still developing, and this can be a barrier to the location of industries. For example, many parts of India do not have reliable electricity or telecommunications services.
Regulations: India’s government has a complex regulatory system, which can make it difficult for businesses to operate in the country.
Corruption: Corruption is a major problem in India, and it can add to the cost of doing business in the country.
Skills: India has a large population, but there is a shortage of skilled workers in some sectors. This can make it difficult for industries to find the workers they need.
Land prices: Land prices in India are rising rapidly, which can make it expensive for businesses to acquire land.

Despite these challenges, India is a growing economy with a large and growing market. This makes it an attractive location for many industries.

Factors responsible for the location of primary, secondary, and Tertiary Sector industries in various parts of the world (including India)

The location of industries is determined by a number of factors, including the availability of natural resources, labor, capital, and markets.

Primary Sector industries are those that extract natural resources from the earth, such as agriculture, mining, and Forestry. These industries are typically located near the source of the natural resources they use. For example, oil refineries are often located near oil fields, and mines are often located near deposits of Minerals.

Secondary Sector industries are those that transform raw materials into finished products, such as manufacturing, construction, and energy production. These industries are typically located near markets, where they can easily sell their products. For example, car factories are often located near large cities, where there is a large demand for cars.

Tertiary sector industries are those that provide services, such as finance, insurance, and tourism. These industries are typically located near major population centers, where there is a large demand for services. For example, banks are often located in large cities, where there are many businesses and people with money to invest.

In India, the primary sector is the largest sector in terms of employment, but it contributes the least to the country’s GDP. The secondary sector is the second largest sector in terms of employment, and it contributes the second most to the country’s GDP. The tertiary sector is the smallest sector in terms of employment, but it contributes the most to the country’s GDP.

The following are some of the factors that have influenced the location of industries in India:

Natural resources: India is rich in natural resources, such as coal, iron Ore, and petroleum. These resources have attracted industries such as mining, steel production, and oil refining.
Labor: India has a large and growing population, which provides a large pool of low-cost labor. This has attracted industries such as textiles, garments, and electronics manufacturing.
Capital: India has a growing economy and a large domestic market. This has attracted foreign investment and domestic investment in industries such as automobiles, pharmaceuticals, and information technology.
Infrastructure: India has a growing infrastructure, including roads, railways, airports, and ports. This has made it easier for industries to transport goods and services.
Government policies: The Indian government has implemented a number of policies to promote industrialization, such as tax breaks, subsidies, and investment incentives. These policies have attracted industries such as automobiles, pharmaceuticals, and information technology.

The location of industries in India is constantly changing, as the country’s economy grows and changes. The factors that influence the location of industries in India are also constantly changing.

Question 1

Which of the following is not a factor responsible for the location of primary sector industries?

(A) Natural resources
(B) Labor costs
(C) Market access
(D) Government policies

Answer
(B) Labor costs

Question 2

Which of the following is not a factor responsible for the location of secondary sector industries?

(A) Labor costs
(B) Market access
(C) Transportation costs
(D) Government policies

Answer
(C) Transportation costs

Question 3

Which of the following is not a factor responsible for the location of tertiary sector industries?

(A) Labor costs
(B) Market access
(C) Government policies
(D) Natural resources

Answer
(D) Natural resources

Question 4

Which of the following is the most important factor in the location of primary sector industries?

(A) Natural resources
(B) Labor costs
(C) Market access
(D) Government policies

Answer
(A) Natural resources

Primary sector industries are those that extract natural resources from the Earth. These industries are typically located near the source of the resources, so that transportation costs are minimized. Labor costs are not a major factor in the location of primary sector industries, because these industries typically require a low-skilled workforce. Market access is also not a major factor, because primary sector industries typically produce raw materials that are used by other industries, rather than by consumers. Government policies can affect the location of primary sector industries, but they are not the most important factor.

Question 5

Which of the following is the most important factor in the location of secondary sector industries?

(A) Labor costs
(B) Market access
(C) Transportation costs
(D) Government policies

Answer
(B) Market access

Secondary sector industries are those that transform raw materials into finished products. These industries are typically located near markets, so that finished products can be transported to consumers at a low cost. Labor costs are not a major factor in the location of secondary sector industries, because these industries typically use a lot of energy and raw materials, which are often transported over long distances. Transportation costs are also not a major factor, because secondary sector industries typically produce finished products that are heavy and bulky, so transportation costs are relatively low. Government policies can affect the location of secondary sector industries, but they are not the most important factor.

Question 6

Which of the following is the most important factor in the location of tertiary sector industries?

(A) Labor costs
(B) Market access
(C) Government policies
(D) Natural resources

Answer
(A) Labor costs

Tertiary sector industries are those that provide services to consumers and businesses. These industries are typically located near markets, so that businesses can easily access the services they need. Natural resources are not a major factor in the location of tertiary sector industries, because these industries typically do not use a lot of natural resources. Government policies can affect the location of tertiary sector industries, but they are not the most important factor. Labor costs are the most important factor in the location of tertiary sector industries, because these industries typically require a high-skilled workforce.