Localisation of industries offers the following advantages:

1. Reduced cost:

Easy availability of raw materials, labour, power and other resources help to reduce cost of production. Lower costs help industries to reduce prices and increase profits.

2. Development of ancillary industries:

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Localisation of one industry attracts ancillary industries to that region. Many small scale units grow to serve the large scale units and use the waste or by-products of big industry.

3. Development of infrastructure:

When industries get localised in an area, roads, roadways and power plants are built in the area in due course of time. Several training and research centres also develop in the area. This has happened in Jamshedpur after the setting up of Tata Iron and Steel Limited.

4. Growth of service sector:

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Localisation of industries, leads to the growth of banks, insur­ance firms and financial institution in the region. Warehousing and telecommunications services also grow to meet the demand from industry.

5. Growth of capital goods industry:

In course of time factories for production of machines and equipment required for industries are established. This gives a boost to the growth of capital goods industry.

6. Development of commerce:

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Commerce and trade make progress in the region where industries are localised.

7. Employment opportunities:

Localisation of industries in a region offer development to a large number of people. It also facilitates better utilisation of local talent and their resources.