LOCATIONAL FACTORS FOR INDUSTRIES

LOCATIONAL FACTORS FOR INDUSTRIES

• Raw Materials: Modern industry is so complex that wide range of raw materials is necessary for its growth. The finished product of one industry may well be the raw material of another.
  • Example: Pig iron, produced by the smelting industry, serves as the raw material for steel making industry.
• Power: Regular supply of power is a prerequisite for the localization of industries. Coal, mineral oil, and hydroelectricity are the three important conventional sources of power.
  • Example: Aluminium industry which is a great user of cheap hydroelectric power are generally found in the areas of hydropower production.
• Labour: In our country, modern industry still requires a large number of workers in spite of increasing mechanisation. Labour supply is important in two respects:
  • Workers in large numbers are often required.
  • People with skill or technical expertise are needed.
• Transport: Transport by land or water is necessary for the assembly of raw materials and for the marketing of the finished products.
  • Example: Development of railways in India, connecting the port towns with hinterland determined the location of many industries around Kolkata, Mumbai, and Chennai.
• Market: Nearness to market is essential for quick disposal of manufactured goods. It helps in reducing the transport cost and enables the consumer to get things at cheaper rates.
• Water: Many industries are established near rivers, canals, and lakes.
  • Example: Iron and steel industry, textile industries, and chemical industries require large quantities of water, for their proper functioning.
• Site: It should be flat and well served by adequate transport facilities. Large areas are required to build factories. Now, there is a tendency to set up industries in rural areas because the cost of land has shot up in urban centres.
• Climate: A harsh climate is not much suitable for the establishment of industries. There can be no industrial development in extremely hot, humid, dry, or cold climates.
  • Example: Extreme type of climate of northwest India hinders the development of industries. In contrast to this, the moderate climate of west coastal area is quite congenial to the development of industries.

COAL INDUSTRIES

Formation of Coal

• Formation: Coal was formed around 300 million years ago when the earth was covered with swampy (marshy) forests.
• New plants fell off: As the plants grew, some died and fell into the swamp waters. New plants grew up to take their places, and when these died, still more grew.
• Rotting of plants: In time, there was a thick layer of dead plants rotting in the swamp. The surface of the earth changed, and water and dirt washed in, stopping the decaying process.
• Layer forming: More plants grew up, but they too died and fell, forming separate layers. After millions of years, many layers had formed, one on top of the other.
• Packing of lower layer: The weight of the top layers and the water and dirt packed down the lower layers of plant matter.
• Conditioning: Heat and pressure produced chemical and physical changes in the plant layers, which forced out oxygen and left rich carbon deposits. In time, the material that had been planted became coal.

Distribution of coal in India

1. Gondwana Coalfields (250 million years old)
   • Size: Gondwana coal makes up to 98% of the total coal reserves in India and 99% of the coal production in India.
   • Mixture: Gondwana coal is free from moisture and contains phosphorus and sulphur. The volatile compounds and ash (usually 13–30 percent) don’t allow the carbon percentage to rise above 55 to 60 percent.
   • Less carbon content: Carbon content is less compared to the Carboniferous coal (which is 350 million years old and is almost absent in India due to its much younger age).
   • Significance: Gondwana coal forms India’s metallurgical grade and superior quality coal.
   • Classification: Damuda series (i.e., Lower Gondwana) possesses the best-worked coalfields, accounting for 80 percent of the total coal production in India.
     • 80 out of 113 Indian coalfields are located in the rock systems of the Damuda series (named after Damodar river).

• Location: These basins occur in the valleys of certain rivers viz., the Damodar (Jharkhand-West Bengal); the Mahanadi (Chhattisgarh-Odisha); the Son (Madhya Pradesh-Jharkhand); the Godavari and the Wardha (Maharashtra-Andhra Pradesh); the Indravati, the Narmada, the Koel, the Panch, the Kanhan, etc.

1. Tertiary Coal Fields (15 to 60 million years old)
   • Carbon content: It is very low but is rich in moisture and sulphur.
   • Location: Tertiary coalfields are mainly confined to extra-peninsular regions.
     • Assam, Meghalaya, Nagaland, Arunachal Pradesh, Jammu and Kashmir, Himalayan foothills of Darjeeling in West Bengal, Rajasthan, Uttar Pradesh, and Kerala.
     • Exceptions: Tamil Nadu and UT of Pondicherry also bear tertiary coal reserves.

Location-wise distribution of coal in India:

• Damodar Valley Coalfield: It is the largest coal reserve in India. The coalfield area includes the states of Jharkhand and West Bengal. Jharia of Jharkhand is the largest coalfield of India. Most of the coking coal in India is obtained from here.
  • Other coalfields in Jharkhand are Jayanti, Bokaro, Karanpura, Ramgarh, Giridh, Auranga, Hutar, Deltenganj, and Deogarh. Major coalfields in West Bengal are Raniganj (oldest coalfield of India) and Dalingkot in Darjeeling district.
• Son Valley Coalfield: The region of Madhya Pradesh and some areas of Uttar Pradesh are included in it. Prominent coalfields in the Son Valley are Singrauli, Sohagpur, Umaria, Pench, Ramkola, and Tatapani.
• Mahanadi Valley Coalfield: The areas of Chhattisgarh and Odisha are included in it. Major coal mining areas in Chhattisgarh are Korba, Jhilmil, Chirmiri, Vishrampur, Lakhanpur, Sonhat, Birampur, and Sonhat. Talcher, Rampur-Himgir, and Ib river coalfield are the prominent coalfields in Odisha.
• Godavari Valley Coalfield: The region is in the states of Andhra Pradesh and Telangana. Major coalfields in the region are Singreni, Tandoor, and Sasti.
• Wardha Valley Coalfield: Kampti, Wunfield, Chandrapur, Yavatmal, and Nagpur are major coal mining areas located in Maharashtra.
• Satpura Coalfield: The region is in the Satpura range, south of the Narmada river. Major coal mining centres are Ghorbari, Mahapani, and Patharkheda.
• Rajmahal Coalfield: Major coal-mining centre in the Rajmahal range is Lalmatia where open-cast mining is practised.

Distribution of coal across the world

The coal deposits exist in nearly every part of the world, but commercially exploitable coal reserves are found mainly in China, USA, India, Australia, Indonesia, Russia, Canada, South Africa, Colombia, Kazakhstan, and Ukraine.

• China: Although China has the third largest coal reserves worldwide, it is the biggest coal producer. Most coal reserves are located in the north and north-west of China, which poses a large logistical problem for supplying electricity to the more heavily populated coastal areas. The majority of the proven coal reserves in China are found in Northern Shansi, Shensi, and Inner Mongolia.
• USA: The USA has the largest coal reserves worldwide and is also one of the largest coal producers. The coal reserves are widely distributed across the country. Major coal mining areas in the USA are Appalachian, Montana, Wyoming, Illinois, Indiana, western Kentucky, West Virginia, Alabama, Pennsylvania, Ohio, Missouri, Michigan, and Texas.
• Russia: Russia has the second largest coal reserves worldwide and is the sixth-largest producer. Major coal reserves include Donetskii in Moscow, Pechora basins in western Russia and the Kuznetsk, Kansk-Achinsk, Irkutsk, and South Yakutsk basins in Eastern Russia. Kansk-Achinsk Basin and the Raspadskaya mine in the Kemerovo region.
• Australia: Australia has the fourth largest coal reserves in the world and the largest in the Southern Hemisphere. Major coal mining areas are New South Wales, Queensland, and Victoria.
• Canada: Canada’s major coal reserves are located in sedimentary basins of Nanaimo, Bowser, Skeena, Moose River, Maritime, and Bowron River.
• Germany: Prominent coal reserves of Germany are in the regions of Ruhr Coal Basin in the North Rhine-Westphalia state, Saar Basin in the south-west Germany, Rhineland region, and Garzweiler.
• Ukraine: Most of Ukraine’s coal reserves are found in Donets Basin in Eastern Ukraine. The Donets Basin is spread across three Ukrainian provinces – Donetsk, Dnipropetrovsk, and Luhansk.
• South Africa: South Africa accounts for the majority of coal production in Africa. The prominent coal mining regions of South Africa are Transvaal, Cape of Good Hope, and Natal.
• Kazakhstan: Major coal mining regions in Kazakhstan are Karaganda, Ekibastuz, Turgay, Nizhne-Iliyskiy, and Maikuben basin.
• Colombia: Colombia has the biggest coal reserves in South America. Major coal reserves are in the Guajira peninsula. Cerrejón is the biggest coal mine in Colombia, followed by the La Loma coal mine.

Classification of Coal (On basis of Carbon Content)

• Anthracite: It is the best quality of coal with highest calorific value and carries 80 to 95% carbon content. It ignites slowly with a blue flame and is found in small quantities in Jammu and Kashmir.
• Bituminous: It has a low level of moisture content with 60 to 80% of carbon content and has a high calorific value. Jharkhand, West Bengal, Odisha, Chhattisgarh, and Madhya Pradesh have deposits of Bituminous.
• Lignite: It carries 40 to 55% carbon content and is often brown in color with high moisture content; thus, it gives smoke when burnt. Rajasthan, Lakhimpur (Assam), and Tamil Nadu have deposits of Lignite.
• Peat: It is the first stage of transformation from wood to coal with low calorific value and less than 40% carbon content.

Significance of coal sector in India

• Domestic energy needs: Coal is the most abundant fossil fuel, accounting for 55% of the country’s energy needs.
• Growth in Secondary sector: The coal sector (including coal-powered electricity generation) accounts for 10% of the Index of Industrial Production (IIP).
• India largest consumer: India is one of the largest energy consumers and is greatly dependent on imports for high-quality coal, especially for the steel industry.
• Backward and forward linkages: Major industries that drive the Indian economy, like iron and steel, aluminum, cement industry, etc., are dependent on the coal sector.
• Source of revenue: State-owned Coal India, the world’s largest coal mining company, is a major source of revenue for state coffers through dividend payments and taxes.
• Cheapest source of energy: It is by far cheaper than nuclear, natural gas, and oil.
• Easier to mine and transport: Unlike crude oil and radioactive materials, coal is mined and transported with much ease.
• Rising energy demand: By 2040, the energy demand is expected to more than double.

Challenges of coal sector in India

1. Economic Challenges

• Parallel economy run by coal mafia: Contributed to coal black market, diversion of good quality coal, expropriation of government lands, etc.
• Import dependence on high grade coal: Majority of India’s coal production is non-coking coal; coking coal has to be imported.
• Restrictive policies: Led to artificial shortages which limited the choices of the manufacturing sector either to shift the input or to import coal.
• Poor transportation: Most coal lies in inaccessible areas of the country. Hence, transporting it to the location of its use posed additional challenges.
• Domino effect: Disruption in supplies causes significant impact on productivity of steel and power industries as they are dependent on the coal sector.
  • E.g.: 2018 power crisis in Tamil Nadu was due to the shortage of coal supply.

2. Administrative Challenges

• Bureaucratic Inertia: The delay in clearance for mining coal impedes the realization of the reserves’ actual potential.
• Lack of transparency: Allocation of coal blocks faces arbitrariness and lack of transparency. E.g.: Coal scam of 2014.
• Shift to renewable energy: Global push towards renewable energy can counteract India’s initiatives to increase coal production.

3. Technology Challenges

• Low productivity: Use of unscientific mining methods leads to a decrease in productivity of mining.
• Lack of R&D in coal sector: Poor level of technological upgradation and adoption.
• Capital intensive:
  • The sector requires high operational and maintenance costs.
  • Low international investment and high dependence on debt financing from state banks.
• Infrastructure challenges: Poor railway links to evacuate coal from hinterlands.

4. Environmental challenges

• Source of pollution: Severely affects the atmosphere through coal particulate pollution.
• Water Usage: Low-grade coal mined in India needs to be washed, which requires much more water and causes water pollution too.

5. Geographic Challenges

• Uneven distribution: Most of the north plains and western parts of India are devoid of coal. This involves high transport costs to carry heavy commodities like coal over long distances.
• Low quality and carbon content: Indian coal has high ash content and low calorific value. The ash content varies from 20 to 30 percent and sometimes exceeds 40 percent. This reduces the energy output of coal and complicates the problem of ash disposal.

6. Social Challenges

• Hazardous to miners:
  • Wall failure, roof collapse, gas poisoning, explosions are dangerous for miners.
  • Lung diseases like black lung disease, silicosis, etc., are common among the residents of the vicinity.
• Displacement of tribal: The forests and agricultural lands belonging to the tribal people have been laid waste because of haphazard mining.
• Health issues: Coal mining is also linked to many health hazards among workers. The practice of rat hole mining is an example of how economic necessities force workers to overlook dangers to safety, environment, and health. The rat hole mining accident in Meghalaya is a case in point.

Government Initiatives

1. Government Schemes

• SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India): For auction and allotment of coal linkages and will lead to affordable power, access to coal, and accountability in the allocation of coal.
• PM Khanij Kshetra Kalyan Yojana: To provide for the welfare of areas and people affected by mining-related operations.

• UTTAM (Unlocking Transparency by Third Party Assessment of Mined Coal) app: For all citizens and coal consumers to monitor the process of Third-Party Sampling of coal across CIL subsidiaries.

2. Policy Changes

• New coal linkage policy: To ensure adequate supply of the fuel to power plants through reverse auction.
• Online Coal Clearances System: To provide a single window access to its investors to submit online applications for all the permissions/clearances and approvals granted by the Ministry of Coal.
• Coal Allocation Monitoring System (CAMS): To monitor the allocation of coal by CIL to States, States to State Nominated Agencies (SNA), and SNA to such consumers in a transparent manner.

3. Legislations

• Coal Mines (Special Provisions) Act, 2015: Enabled allocation of coal mines through transparent auctions.

Way Forward

• More transparency: Currently, it is not easy to obtain data or information regarding many aspects of the coal sector. This makes it difficult for citizens to demand accountability from the sector. Therefore, complete transparency in the form of regular publication of information related to all aspects of the sector is needed. This would help in improving accountability.
• Improve policies: It is important to increase the level of public participation and inputs in decision making. All policies must be published in draft form and must be finalised after comments are invited from citizens and the feedback is incorporated.
• Local participation: Local citizens must be involved in coal mining-related activities. Before the mine starts, there should be meaningful public hearing processes regarding environmental and social impacts, and associated compensation mechanisms. During the mine’s operation, local citizens can help oversee the operations and ensure compliance with existing norms.
• Rehabilitation: Innovative approaches such as long-term lease of land and offering equity should be tried in rehabilitation processes. Proper compensation must be ensured to displaced people.
• Strengthening Institutions: The capacity of the relevant institutions must be enhanced. Plans must be developed to increase the capacities of the coal industry. This would help in improving the planning, operations, and oversight of the sector.

IRON AND STEEL INDUSTRIES

Iron ore, when extracted, needs two elements for further processing: limestone and coking coal. Other factors are water for cooling and energy needed for heating. Coal mines are usually located in the middle latitudes, hence iron industries also developed there. Secondary industries too are located in these regions as they depend on iron or coal as raw materials. Tropical latitudes hardly have any significant coal fields, so little industrial development is seen there.

Location Factors

• Near Forests: Charcoal was used as an energy source for heating the furnaces. Thus, iron ore factories were located near forests to ensure a supply of wood.
• Near Coal mines: Coal mines had the necessary labor available. Besides, iron ore was found in coal seams. To produce 1 ton of iron ore, 8-12 tons of coal were needed. Hence, it was easier to transport iron ore to coal fields than coal to iron ore.
• Raw material: The iron and steel industry uses a large quantity of heavy and weight-losing raw material, so its location is primarily guided by the availability of raw material.
  • Example: Most of the iron and steel plants in India, such as Jamshedpur, Burnpur, Durgapur, Rourkela, Bhilai, and Bokaro, are located in Jharkhand, West Bengal, Orissa, and Chhattisgarh. These states are rich in coal and iron ore deposits and are important producers of these materials.
• Market: Steel products of an integrated steel plant are quite bulky, and it has been estimated that the transport cost per tonne-kilometer of steel product is about three times more than that of coal or iron ore. Following the theory of minimum transportation cost, many centers of iron and steel production tend to be located near markets.
• Transportation: Both raw materials and finished products are bulky and require significant transportation facilities.
• Technology: With the increasing popularity of open-hearth processes, scrap has become an important raw material in this industry. Recent technological developments in transport and the use of scrap as a raw material, along with agglomeration economics, have made market-oriented locations more advantageous than before.
• Port location: Port locations provide easy and cheap transportation, which is helpful for the import of raw materials and the export of finished products. When basic raw materials need to be imported or finished steel exported, seaports are preferred.
  • Example: Vizag Steel plant is an important example of this kind of location.
• Labour: Cheap and abundant labor is required for this industry. Therefore, West Bengal and nearby regions provide favorable locations for industrial establishments in the iron and steel industry.
• Government policy: The responsibility of balanced regional development rests with the government. The government has invested heavily in backward areas for developing these industries (e.g., in Jharkhand, Orissa, Chhattisgarh). This approach aligns with the principle of the Trickle-down theory of Growth Pole and Growth Centre.

Distribution pattern of iron and steel industry across the world

• China: The iron and steel industry is concentrated in Anshan, Wuhan, and Paotow triangle. The biggest iron and steel factory was established in the Chinese mainland at Anshan in Manchuria by Japanese and Russian help. Other iron and steel production centers in Manchuria are Fushun, Penki, Shenyang, Harphin, and Kirin.
• Japan: Over half of Japan’s steel capacity is concentrated near the major port cities of Himeji, Kobe-Osaka, and Tokyo-Yokohama areas of South Central Honshu. Almost all the iron and steel plants of Japan are situated near tidewater to draw raw materials from many parts of the world and to ship finished products.
• United States of America: The steel industry at Pittsburgh, USA, enjoys locational advantages.
  • Some raw materials such as coal are available locally, while the iron ore comes from the iron mines at Minnesota, about 1500 km from Pittsburgh.
  • Between these mines and Pittsburgh is one of the world’s best routes for shipping ore cheaply — the famous Great Lakes waterway.
  • Trains carry the ore from the Great Lakes to the Pittsburgh area. The Ohio, Monongahela, and Allegheny rivers provide adequate water supply.
• Russia-Ukraine: The four important iron- and steel-producing regions are Ural region, Kuznetsk or Kuzbas region, Moscow region, and others such as Baikal, St. Petersburg, Lower Amur valley, and Pacific coastal region.
• Italy: It has emerged as a leading iron- and steel-producing country not only in Europe but also in the world. It ranks 11th in the world’s production of iron and steel. Although Italy has a shortage of both coal and iron ore, it has developed this industry through well-planned management. Major steel plants in Italy are located at Naples, Genoa, Aosta, and Trieste.

Distribution of iron and steel industry in India

• Jamshedpur in Bihar: In 1911, India’s first iron and steel plant—Tata Iron and Steel Company Ltd. (TISCO)—was set up in Jamshedpur, Bihar, in private collaboration with a US firm.
• Burnpur in Bengal: Nearly 3.5 decades later, another plant was launched at Burnpur in neighboring Bengal—the Indian Iron and Steel Company Ltd. (IISCO)—with British participation.
• Post-independence: At the commencement of the Five-Year Plans (1951), there were three steel plants located at Jamshedpur, Asansol, and Bhadravati. The capacity of these plants was increased, and six integrated plants in the public sector were established at:
  • Durgapur, Rourkela, Bhilai, Bokaro, Vishakhapatnam, and Salem.
  • Additionally, more than 140 mini steel plants have been set up to meet growing internal demand.

Significance of iron & steel industry

• Link to development: It is an index of modernity, and the development of the steel industry has a direct link with the development of a country.
• Backbone for physical infrastructure: The iron and steel industry acts as a backbone for the physical infrastructure development of the country.
• Provides strong forward-backward linkages: The iron and steel industry provides strong forward-backward linkage for the industrial infrastructure of a country.

• Important for regional development: The iron and steel industry is important for the regional development of the places where these industries are located.
• Important for other industries: The iron and steel industry plays a major role in the development of many other industries like the automobile industry.
• Generate employment: The iron and steel industry has generated huge employment, especially in backward areas where these industries are located.
• Boost transportation: The iron and steel industry boosts the transportation sector, including road, railway, airways, and waterways.
• Important for R&D: The iron and steel industry is important for the growth of the research and development sector in India.

Challenges

• Demand and competition: Poor demand, price slump, competition from cheaper imports, and delays in project execution are major problems in the Indian steel industry.
• Inefficiency: Inadequate supply of power and coal, inefficiency of public sector units, and under-utilization of capacity are other challenging issues.
• Funding issue: Indian banks are grappling with bad loans (NPA), and at the same time, the industry, which has a long gestation period, requires huge investment.
• Bottleneck: Raw material and infrastructure bottlenecks are also present.
• Obsolete technology: PSUs have been led to inferior quality products due to outdated technology.
• Under-utilization of labour: Frequent strikes, lockouts, inefficient management (e.g., slow land acquisition, environmental clearances) facilitate dumping in the market, decreasing global prices and affecting domestic producers and exports.
• Global glut and a surge in cheap imports: Imports from China, Russia, Korea, and Japan have dented the domestic industry’s fortunes.

Government initiatives

• National Steel Policy 2017: The policy lays down the roadmap for encouraging long-term growth for the Indian steel industry, both on demand and supply sides, by 2030-31.
  • Key features of the NSP 2017: Include establishing self-sufficiency in steel production with policy support and guidance for private manufacturers, MSME steel producers, and CPSEs.
• Steel Scrap Recycling Policy: Aims to promote the 6Rs principles (Reduce, Reuse, Recycle, Recover, Redesign, and Remanufacture) through scientific handling, processing, and disposal of all types of recyclable scraps, including non-ferrous scraps, via authorized centers/facilities.
• E-Platform: MSTC Metal Mundi launched to facilitate the transparent sale of finished and semi-finished steel products.
• Allowing 100 percent Foreign Direct Investment (FDI) in the steel sector under the automatic route.
• Export duty: A 30 percent duty has been levied on iron ore (lumps and fines) to ensure supply to the domestic steel industry.
• Digitization of mines in steel CPSEs: To improve operational and cost efficiencies and increase transparency in the mining sector, digitization is being implemented across steel CPSEs.

Way Forward

• Modernisation planning: The iron and steel industry needs comprehensive planning for modernisation, up-gradation of technologies, replacement of obsolete equipment, and removal of technological imbalances.
• Long term financing: The government is trying to support the industry through the RBI’s strategic debt restructuring scheme. However, long-term finance sources such as pension funds and savings are needed, which can withstand cyclical volatility of profits, unlike funding from banks or capital markets.
• Anti dumping duties: Imposing duties on cheap imports to protect domestic producers.
• Focus on infra: More emphasis on infrastructure and the automobile industry to increase domestic demand and job creation, countering the global slowdown.
• Servicing of bad loans: Government provision of capital and review of credibility before dispatching loans.
• Increased foreign investment.

COTTON TEXTILE INDUSTRY

In the 18th century, power looms facilitated the development of the cotton textile industry, first in Britain and later in other parts of the world. Today, India, China, Japan, and the USA are important producers of cotton textiles.

Major distribution in India

1. Mumbai: The first successful mechanized textile mill was established in Mumbai in 1854.
   • Factors: The warm, moist climate, a port for importing machinery, availability of raw material, and skilled labour contributed to the rapid expansion of the industry in the region.
   • Climate: Initially, this industry flourished in Maharashtra and Gujarat due to the favourable humid climate.
   • Current situation: Humidity can now be created artificially, and raw cotton is pure and not weight-losing, so this industry has spread to other parts of India.
2. Ahmedabad: Located in Gujarat on the banks of the Sabarmati river. The first mill was established in 1859, and it is referred to as the ‘Manchester of India’.
   • Raw material: Proximity to cotton-growing areas ensures easy availability of raw material.
   • Climate: Ideal for spinning and weaving.
   • Geography: The flat terrain and easy availability of land are suitable for the establishment of mills.
   • Labour: Gujarat and Maharashtra, being densely populated, provide both skilled and semi-skilled labour.
   • Transportation: A well-developed road and railway network permits easy transportation of textiles to different parts of the country, ensuring access to markets.
   • Shipping: The nearby Mumbai port facilitates the import of machinery and the export of cotton textiles.
3. Other areas: Coimbatore, Kanpur, Chennai, Ahmedabad, Mumbai, Kolkata, Ludhiana, Puducherry, and Panipat are some other important centres.

Major distribution of cotton industries in the world

• Osaka: It is an important textile centre of Japan, also known as the ‘Manchester of Japan’. The textile industry developed in Osaka due to several geographical factors.
  • Terrain: The extensive plain around Osaka ensured that land was easily available for the growth of cotton mills.
  • Climate: Warm humid climate is well suited to spinning and weaving.
  • Raw materials: The river Yodo provides sufficient water for the mills. But the textile industry at Osaka depends completely upon imported raw materials.
    • Cotton is imported from Egypt, India, China, and the USA.
  • Labour: Easily available.
  • Shipping: The location of the port facilitates the import of raw cotton and the export of textiles.
  • Market: The finished product is mostly exported and has a good market due to good quality and low price.

FOOTLOOSE INDUSTRIES

Footloose industry is a general term for an industry that can be placed and located in a wide variety of places without much effect from factors such as raw material. These are called footloose as these types of industries are prone to relocation. For example, diamond and computer chip industries belong to the footloose industry.

Important characteristics of footloose industries

• Location: Footloose industries can be established at any place. These industries are not affected by raw material locations, and components are available at all places.
• Less labour force: These industries produce products in small numbers and do not require a large labour force.
• Eco-friendly: These industries are environment-friendly as their processes have a negligible carbon footprint, emitting little to no pollution.
• Less transport cost: Products have high value addition and are smaller in size, so transportation costs are a small fraction of the total cost.
• Small plant size: These industries require a smaller plant size compared to heavy industries.
• Less raw material dependence: They are less dependent on specific raw materials, especially weight-losing ones. Most raw materials are small, light, and easily transported.
• Skilled workers: These industries require skilled workers as the processes are advanced and need high precision.

Factors responsible for the location of footloose industries

• Connectivity: Locations with good connectivity of roads, railways, telecommunication, and airways facilitate the quick movement of skilled workers and high-value outputs.
• Cheap land: They are often located on the edges of cities because land is cheaper than in city centers. The out-of-town surroundings and easy access to workers in the suburbs make it an ideal location.
• Accessibility: The important factor in their location is accessibility by the transportation network, enabling workers to commute hassle-free.

• Example: The extensive network of metro, railway, and road in NCR helped the service industry in Gurugram and Noida.

• Close to similar industries: They are also located close to similar industries to facilitate the exchange of ideas and knowledge.
• Raw material independent: The computing and information technology industry is not tied to raw materials and can choose their own location.

• Example: Mega cyber cities like Bangalore and Hyderabad.

• Close to research centres: Hi-tech industries need to be located near research centres like universities. Development in the hi-tech industry happens so fast that companies need to stay updated to survive.

• Example: Software technology parks in India.

These industries are crucial for developing areas that lack locational advantages in heavy and small industries like port facilities and raw material availability. Good development of the footloose industry can provide high-value employment opportunities and competitive advantages in world trade.

JUTE INDUSTRY

Jute Industry’s Location in India

1. Distribution of Industries
   • West Bengal: Has the largest concentration of the jute industry, accounting for more than 80% of production and mills.
     • Most of the jute mills are within a 64 KM radius around Calcutta, confined to a narrow belt 3 KM wide and 100 KM long along the Hugli River.
   • Other major States: The industry has dispersed westwards, with Andhra Pradesh accounting for another 10%, and the rest in UP and Bihar.
2. Location Factors
   • Availability of quality jute: Mills should be close to jute production areas for easy access to raw materials.
   • Transportation: Cheap road and water transportation is required for transporting raw and finished goods.
   • Cheap labour: A high population density provides abundant cheap labour.
   • Water: Abundant water is necessary for processing, washing, and dyeing jute.
   • Market: A developed settlement ensures easy capital flow in this industry and provides a robust market.
   • Power: Coal and ready power are needed for continuous operation of mills.
3. Reason for high concentration of jute mills in West Bengal
   • Raw material: The Ganga-Brahmaputra delta produces about 90% of India’s jute.
   • Water: The Hugli River provides an abundant water supply needed for retting, washing, dyeing, etc.
   • Transportation: The Hugli River offers cheap transportation for the industry, while a dense network of roads and railways has also helped develop the jute industry in the Eastern region.
   • Climate: Humid climate is suitable for jute cultivation. It is very convenient for spinning and weaving raw jute.
   • Energy availability: The Raniganj field within a 200 KM distance provides coal to the industry. The DVC also provides ready power to the industry.
   • Labour: The high population density in West Bengal, Bihar, and Eastern U.P. provides cheap labour for the industry. Approximately 4 million farmers, mostly small and marginal, and 2 lakh workers are engaged in jute cultivation and production.
   • Port: The Calcutta port serves this region for importing machinery and other materials and exporting finished products. The riverine nature of the port facilitates easy mobility of various products.
   • Market: The rich hinterland of Calcutta and the industrial development around it provide a ready market for the jute industry.
   • Capital availability: Kolkata had good banking and finance facilities as it was initially the capital of British India, which helped the jute mills flourish.

Significance of Jute Industries

1. Economic
   • Labour intensive industry: Engages approximately 4.35 million people. Diversification into jute goods has opened large employment opportunities, such as for jute bags, footwear, garments, gift items, and home decoration items.
   • Balancing regional development: The jute industry has significant potential to provide employment, especially in the East Indian region. It offers job opportunities to about 7,500 people annually, with further expansion potential in new mills.
   • Useful in civil engineering: Jute geo-textiles can be used for erosion control, separation, filtration, and drainage in civil engineering work and agriculture. They are also used in rural road pavement construction and agro plant mulching.
   • Export earnings: The jute industry contributes export earnings in the range of Rs. 1,000 to Rs. 1,200 crore annually.
   • Provide employment: The sector provides direct employment to approximately 3.70 lakh workers. It supports the livelihood of around 40 lakh farm families, with mill closures adversely affecting both workers and farmers whose produce is used in the mills.
2. Environment
   • Environmental benefits: Jute fibre is 100% biodegradable and recyclable, making it environmentally friendly. A hectare of jute plants consumes about 15 tonnes of carbon dioxide and releases 11 tonnes of oxygen.
   • Suitable substitute for plastic: Jute is easily reused and recycled and is biodegradable, making it a potent substitute for plastic, thereby minimizing land and water pollution.
   • Fertility of soil: Jute cultivation in crop rotations enriches the soil’s fertility for the next crop. It also does not generate toxic gases when burnt.

Advantages of using Jute fabrics over Polypropylene/Plastic

• Environmentally friendly: Jute is environmentally friendly and completely biodegradable, whereas synthetics can pose various hazards.

• Indigenous in nature: Jute bags are indigenously processed products, while synthetic bags are manufactured from polyester granules whose production poses several hazards.
• Less toxic: The toxic effects of synthetics are severe—both in production and disposal—which is why many Western countries have banned their use for food packaging.
• High porosity: Jute bags have high porosity, can easily withstand high temperatures, and are much stronger than poly sacks.
• Less polluting: Emission of obnoxious gases, particles, and volatile organic compounds during disposal causes pollution and harms the environment.
• Easy to recycle: Jute bags can be recycled, reused, and easily repaired.

Problems of the Jute Industry

• Shortage of Raw Material: Despite the expansion of the jute growing area and intensified cultivation, India is not self-sufficient in raw material supply. Raw materials are imported from Bangladesh, Brazil, and the Philippines. A Golden Fibre Revolution is needed in India.
• International Competition: India faces strong competition from Bangladesh, Brazil, Japan, the Philippines, and South Korea.
• Obsolete Machinery: Most machinery in jute mills is over 25 years old, leading to outdated and low production capacity.
• Shortage of Power Supply: Load-shedding causes under-utilization of capacity.
• Low Yield Per Acre: India produces a low quantity of jute per unit area.
  • For example: Bangladesh’s average yield per hectare is 1.62 tonnes, compared to India’s 1.3 tonnes per hectare. China’s yield is 1.78 tonnes per hectare, and Taiwan’s is 2 tonnes per hectare.
• Low acreage area: The cultivated area has stagnated, resulting in low productivity and falling crop prices.
• Competition from Substitutes: The jute industry faces tough competition from synthetic bags.
• Strikes and Lock-outs: Frequent strikes by trade unions disrupt routine jute production.
• Decrease in the Demand for Jute Products: International demand for jute products is steadily decreasing.
• Lack of marketing strategy: While jute products are environmentally friendly, they are not marketed effectively, leading to reduced demand.
• Not waterproof: Jute was commonly used to transport sugar, salt, and cement, but leakage issues have limited its use.
  • For example: The railway banned the use of certain jute sacks for salt transportation.

Current Challenges

• High prices: Mills procure raw jute at prices higher than their selling price post-processing.
• Procurement Process is Cumbersome: Mills do not acquire raw material directly from farmers due to the distance between farms and mill locations, making the process cumbersome.
• Flows through middlemen or traders: Middlemen charge for their services, which involves procuring jute from farmers, grading it, and bringing the bales to the mills.

• Cyclone Amphan and the subsequent rains in major jute-producing states: These events led to lower acreage, resulting in lower production and yield compared to previous years.
• Hoarding: Acreage issues were accompanied by hoarding at all levels, from farmers to traders.
  • For example: The government has a fixed Minimum Support Price (MSP) for raw jute procurement from farmers, set at Rs. 4,750 per quintal for the 2022-23 season. However, this reaches the mill at Rs. 7,200 per quintal, which is Rs. 700 more than the Rs. 6,500 per quintal cap for the final product.
• Pandemic: The coronavirus pandemic has also affected the industry, with several mills shutting down and lockdowns causing labour and raw material shortages.

Government Initiatives

1. Schemes
   • Incentive Scheme for Acquisition of Plants and Machinery (ISAPM): Launched in 2013 to modernize existing and new jute mills and upgrade technology.
   • Jute-ICARE (Improved Cultivation and Advanced Retting Exercise): Launched in 2015, aimed at assisting jute cultivators by providing certified seeds at subsidized rates and promoting new retting technologies suitable for water-limited conditions.
   • Jute Technology Mission (JTM):
     • Approved by the Indian government in 2006 with four mini-missions.
     • Objectives:
       • Strengthen agricultural research and technological achievements.
       • Develop and extend raw jute ministry and transfer improved technology.
       • Develop efficient market linkages for raw jute.
       • Modernize, upgrade technology, improve productivity, diversify textiles, and develop human resources for the jute industry.
2. Policies and Executive Actions
   • Mandatory Packing: The government expanded the scope of mandatory packaging norms under the Jute Packaging Material (JPM) Act, 1987, mandating that 100% of food grains and 20% of sugar be packed in diversified jute bags.
     • Aim: To benefit farmers and workers, particularly in the Eastern and Northeastern regions.
   • Dependence on Government: The jute industry relies heavily on the government sector, which purchases jute bags worth over Rs. 6,500 crore annually for packing food grains.
   • National Jute Policy: Announced in April 2005 to strengthen the sector and maintain a strong global position in manufacturing and exporting jute products, enabling the industry to build state-of-the-art manufacturing capabilities.

• Jute SMART: An e-governance initiative launched to promote transparency in the jute sector by providing an integrated platform for the procurement of B-Twill sacking by government agencies.
• Jute Corporation of India (JCI): Granted Rs. 100 crore for 2 years starting from 2018-19 to enable JCI to conduct MSP operations and ensure price stabilization in the jute sector.
• Jute Design Cell: To support diversification in the jute sector, the National Jute Board collaborated with the National Institute of Design, establishing a Jute Design Cell in Gandhinagar.
• Jute Geo Textiles and Agro-Textiles: Promotion has been taken up with state governments, particularly in the North Eastern region, and with departments such as the Ministry of Road Transport and the Ministry of Water Resources.
• National Jute Board: Implements various schemes for market development, workers’ welfare, and the promotion of diversification and exports.

Way Forward

• Improve quality: Innovative methods of bleaching, dyeing, and processing have led to finished jute products that are softer and more aesthetically appealing.
• Diversification of jute products: Includes clothing items, decorative items, and carpet matting, which improve durability and expand the range of jute industry products.
• Reduce cost: Continued R&D to implement new technologies, diversify products, and modernize machinery intensively.
• Increase cultivation: Jute cultivation has expanded due to increased demand from industries like sugar in UP and cement in MP.
• Encourage usage: Since jute is environmentally friendly and renewable, its use should be promoted, e.g., making jute packaging mandatory.
• Promotion: Positioning jute as a lifestyle statement for the new generation.

INFORMATION TECHNOLOGY (IT)

The IT industry deals with the storage, processing, and distribution of information. It has become global due to technological, political, and socio-economic events. Key factors for locating these industries include resource availability, cost, and infrastructure. Major IT hubs include Silicon Valley, California, and Bangalore, India.

• Silicon Valley: Located next to the Rocky Mountains of North America.
  • Temperate climate, with temperatures rarely dropping below 0°C.
• Bangalore: Situated on the Deccan Plateau, also known as the ‘Silicon Plateau’.
  • Known for its mild climate year-round.
  • High availability of middle and top management talent.

Other cities in India:

• Emerging IT hubs include Mumbai, New Delhi, Hyderabad, and Chennai.
• Cities like Gurgaon, Pune, Thiruvananthapuram, Kochi, and Chandigarh are also significant IT centers.

Importance of the IT Sector

1. Economic
   • Revenue Generation: The IT and BPM industry generated over $191 billion U.S. dollars in 2020.
   • Export Potential: Core sector for India’s service exports, driving high growth and revenue.
   • Employment: Employs around 4 million people and contributes significantly to the Indian professional workforce.
   • Investments: Attracts the second highest FDI inflows in India due to a 100% FDI allowance.
   • Lower Labour Costs: Indian developers charge less compared to those in the US and UK, facilitating outsourcing.
   • Economic Transition: Helps India transition from an agro-based to a secondary and tertiary sector economy.
   • Economic Growth: The software sector has driven growth for the last two decades.
   • E-Commerce: Boosts e-commerce and enhances the manufacturing sector.
   • Innovation: Develops innovative software and technology solutions for India and global use.
2. Social
   • Rural Development: Facilitates financial services, education, health, communications, and agriculture.
     • Example: ITC’s e-Choupal connects farmers to vegetable procurement via the internet.
   • Skilled Employment: Improves job standards, transitioning from unskilled to skilled technical roles.
   • Woman Empowerment: Security and educational apps/software enhance women’s financial empowerment.
     • Example: Mahila E-Haat enables women to sell products online.
   • Healthcare: IT solutions include telemedicine, online doctor consultations, and clinical tech for disease detection.
   • Education: Online education innovations, especially during the pandemic, enabled advanced learning tools.
   • Elderly/Disabled: Apps help maintain independence and quality of life.
     • Example: RBI’s MANI app assists the visually impaired in identifying banknotes.
3. Strategic
   • Defence Technology: IT’s role in developing defense software and strategic tools.
     • Example: DRDO’s IMSAS software provides global maritime situational analysis, planning tools, and analytics for the Indian Navy.
   • Space Technology: Indigenous software development is also crucial for Indian space technology and its advancement.
   • Border Surveillance: The BOSS system has been deployed at the Ladakh border for day and night surveillance.
   • Weather: IT contributes to climate and weather system modeling for local and global use.
   • E-Governance: The IT sector is essential for the growth and development of e-governance in India.

RUBBER

Rubber is a highly elastic solid substance, light cream or dark amber in color, produced by the drying and coagulation of the latex or milky juice from rubber trees, particularly the Hevea and Ficus species.

Conditions for Growth

• Climate: Rubber thrives in tropical climates with high temperatures throughout the year (20°-35°C) or an average monthly mean of 27°C. Temperatures below 20°C are detrimental, and heavy rainfall is also necessary.
• Soil: It grows well in a variety of soils, ideally deep, friable, and well-drained soils that promote root development. Acidic soils are also suitable.
• Land: Rubber plantations are suited to plains or gently undulating land, often cleared from forests. Soil erosion can be a concern when the original forest cover is removed, and terraces are sometimes used to manage this.
• Transport: Both internal and external transport networks are vital. Internal transport facilitates latex collection and transportation to processing centers, while external networks are necessary for export.
• Labour: Rubber cultivation is labour-intensive, requiring workers for plantation maintenance, latex collection, rubber preparation, and tree nurturing.

Distribution of Rubber Producing Countries 

• Thailand: Currently the world’s top rubber producer, contributing 3.09 million metric tons or 31% of the global total.
• Indonesia: The adaptation of rubber trees to tropical climates, combined with local efforts and affordable labor, secured Indonesia’s position as the second-largest global producer. Plantations are mostly in Java, Sumatra, and Borneo.
• Malaysia: Rubber is cultivated primarily on the western side of the peninsula and parts of East Malaysia. This success is due to suitable climate, government support, expansion of rubber-growing areas, and the use of local, Indian, and Chinese labor.
• India: Rubber plantations began in 1880 in South India, with Kerala, Tamil Nadu, Karnataka, and the Andaman and Nicobar Islands as main producers.
• West African Producers: Liberia, with its Firestone-owned estates and processing factories, was a top producer for many years.
• Other Countries: Sri Lanka, China, Philippines, Cambodia, Nigeria, Kenya, Zaire, Ivory Coast, and Brazil also produce rubber.

Rubber in India

• Ranking: Fourth-largest producer and user globally (FAOStat 2019).
• Consumption: Primarily used in transportation, followed by the footwear industry.
• Exports: In 2020, India exported over 12,000 metric tonnes of natural rubber.
• Top Importers: Germany, Brazil, the US, and Italy.
• Major Products: Includes automobile tyres and tubes, footwear, pharmaceutical items, hoses, and coats.
• Distribution: The first rubber plantations were established in 1895 in Kerala, the leading state for rubber production in India.

Importance

• Manufacturing: Provides raw materials for over 35,000 products, from toy balloons to large tires.
• Employment: Employs a significant number of people in agriculture, processing, and transport.
• Local Economies: Supports regional prosperity and contributes to economic growth.
• Sectoral Demand: High domestic demand drives growth in production.

Environmental Issues Caused by the Rubber Industry:

• Release of Sulphates: Effluent from latex concentrate factories contains high levels of sulphate, originating from sulfuric acid used in the coagulation process.
  • Example: Most latex factories in Thailand do not have waste management systems to handle these compounds.
• Odour: Odours such as hydrogen sulphide, ammonia, and amines are produced by wastewater treatment processes.
• Production of Carcinogenic Gases: Basic polymers and ingredients used in rubber production can emit carcinogenic gases and fumes during mixing, vulcanization, and storage.
• Discharge of Waste Water: Wastewater from latex processing contains high levels of BOD, COD, and SS.
• Leaching of Chemicals: During the manufacturing and storage of rubber products, various gases, vapours, fumes, and aerosols are emitted due to the leaching of chemicals and during high-temperature vulcanization.
  • Example: Plasticizers, antioxidants, and residual monomers or polymer oligomers, along with primary and secondary reaction products from cross-linking systems.

INDUSTRIAL CORRIDORS

An industrial corridor is a multi-modal transport route connecting states, functioning as a main artery.

Features:

• High-speed transportation network (rail and road)
• Ports equipped for advanced cargo handling
• Modern airports
• Special economic regions/industrial areas
• Logistic parks/transshipment hubs
• Knowledge parks for industrial needs
• Complementary infrastructure like townships/real estate
• Urban infrastructure with enabling policy frameworks
  

Significance of Industrial Corridors

1. Economic:

• Logistic Infrastructure: Provides logistics infrastructure for economies of scale, allowing firms to focus on core competencies.
• Increase Exports: Improved transportation and agglomeration lower production costs, enhancing competitiveness in domestic and foreign markets.
• Employment Opportunities: The surplus from exports leads to job creation and higher per capita income.
• Economic development: The manufacturing and infrastructure sectors will contribute significantly to GDP growth, leading to overall economic prosperity.
• Increase investment: Infrastructure developments attract investments, positioning India as a strong player in the global value chain.
• Increase competitiveness: Improved quality infrastructure enhances India’s competitiveness in manufacturing.

2. Socio-Economic

• Ease burden on urban centres: Job opportunities close to homes help reduce migration to cities, easing pressure on urban infrastructure.
• Raise standard of living: Industrial corridors promote socio-economic development through industrial townships, educational institutions, roads, railways, airports, and hospitals.
• Preserve family as an institution: Employment near homes preserves family structures and promotes social integration.
• Environmental benefit: Balanced development prevents overconcentration of industries, protecting the environment.

Challenges Associated with Industrial Corridors

• Land Acquisition: Legal hurdles and compensation issues slow down land acquisition.
• Destruction and displacement: Investments can lead to human displacement and loss of agricultural land.
• Financial feasibility: Feasibility concerns require potential investors for NMIZ manufacturing units.
• Fear of widening gap: Concerns over increasing rural-urban development disparities.
• Proper assessment: Assessing viability, transport options, land values, and incentives is essential for effective implementation.

National Industrial Corridor Development Programme

1. Programme: Aims to develop new industrial cities as “Smart Cities” integrating next-gen technologies.
2. 11 Industrial Corridors being developed:
   • Delhi Mumbai Industrial Corridor (DMIC)
   • Chennai Bengaluru Industrial Corridor (CBIC)
   • Amritsar Kolkata Industrial Corridor (AKIC)

• East Coast Industrial Corridor (ECIC) with Vizag Chennai Industrial Corridor (VCIC) as Phase 1.
• Bengaluru Mumbai Industrial Corridor (BMIC)
• Extension of CBIC to Kochi via Coimbatore
• Hyderabad Nagpur Industrial Corridor (HNIC)
• Hyderabad Warangal Industrial Corridor (HWIC)
• Hyderabad Bengaluru Industrial Corridor (HBIC)
• Odisha Economic Corridor (OEC)
• Delhi Nagpur Industrial Corridor (DNIC)

Objectives: To enhance India’s competitiveness in manufacturing by creating world-class infrastructure and reducing logistics costs.

Way Forward

• Industrial inclusion: Incorporating an industrial viewpoint for better alignment with current industry needs.
• Proper investment channel: Establishing viable funding channels to support the completion of large-scale projects.
• Private participation: Engaging private entities for expertise in developing industrial corridors.
• Macroeconomic stability: Ensuring a stable exchange rate to mitigate currency risks for foreign investors.
• Clear taxation regime: Defining the tax liabilities of foreign firms in India as permanent establishments and otherwise.