Localisations of industries mean concentration of most of the firms engaged in producing the same type of commodity in a particular region. For example, a large number of factories producing cotton textiles are concentrated in Mumbai and Ahmedabad. Similarly jute industry is localised in West Bengal.
Causes of Localisation
Localisation of industries takes place due to the following reasons:
1. Nearness to raw materials:
An industry tends to localise in the region where raw materials required for that industry are easily available. Nearness to raw materials reduces the cost of production because the cost of transporting raw materials to the factory are minimised. Sugar industry is localised in U.P and Bihar because sugarcane is easily available in these regions.
2. Nearness to market:
Some industries tend to localise near the market. This helps to minimise the cost of transporting finished product from the factory to the market. Industries which export finished product and import raw materials prefer to be located near ports so as to reduce the cost of transportation.
3. Availability of labour:
Labour is an important factor of production. Industries that require skilled labour get concentrated where such labour is easily available. Jute industry is localised in West Bengal due to availability of cheap labour from nearby regions.
4. Availability of power:
Industries require large quantity of power at reasonable rates. Shortage of power causes disturbance in industries. Therefore, factories like blast furnace which requires considerable amount of power prefers to be located in regions where uninterrupted power supply is available.
5. Transport facilities:
The cost of transport plays an important role in the localisation of industries. Generally, industries tend to localise in regions which have good transport facilities in the form of roadways and railways. Communications facilities also influence localisation of industries.
6. Availability of finance:
Finance is the life blood of industry. Therefore, industries tend to localise in regions where banks arid their financial institutions are available.
In some industries a particular type of climate is required. For example, cotton textile industry requires a moist climate, whereas watch manufacturing requires comparatively cool climate. Therefore, such industries are localised in regions having the required climate.
Government allows tax concession to industries located in notified backwards areas to remove regional imbalances in economic development. Some industrial units prefer to localise in backward regions in order to avail of such concessions and rebates.