The development of industries in an area depends upon the following factors:
(i) Near to the raw material:
The industries which use heavy raw material and in a large quantity are generally located in the place of the centre of the raw material. For example, Jute Industries are located in West Bengal; Cotton Textile Industry is located in Mumbai and Ahmadabad.
(ii) Nearness to power:
Power is needed for processing raw materials. The industries which consume huge quantity of power are located near the sources of power.
It helps in centralisation of industries. It influences the establishment of agro- based industries like cotton textile, jute textile etc.
Apart from physical factors there are some human factors that also affect the location of an industry. They are:
(b) Transport facilities
(c) Demand of goods in the area.
No industry can function without labour. Even the modern computerized machines need to be operated by human beings only. Labour may be skilled/unskilled. We need both kinds of labour to set up a factory. For loading, unloading, erection of machines etc. we need labour in the industries.
(b) Transport Facilities:
We need good transport facilities to bring the raw materials to the industries as well as to take the finished goods to the market. Without proper transport facilities the factory cannot run. We have good road, rail, water and air transport for the development of industries.
(c) Demand for Goods:
In a particular area/state/country there may be a good number of industries. These industries may produce a lot of goods but if all the goods are not consumed then these industries may be closed. Some need the good purchasing power of the people around the industries.