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Manufacturing Industries In India: Classification

Updated on December 25, 2014

Classification Of Industries

Industries can be classified on the basis of source of raw materials, management, size and others like location and nature of product, etc.

Classification Of Industries

Classification On The Basis Of Raw Materials

(a) On the basis of consumption of raw materials, there are two type of industries: heavy industry and light industry.

  1. Heavy Industry needs more capital, sophisticated equipment, skilled and unskilled labour and large quantity of raw material. Its finished products are also heavy. Examples: Iron and steel industry, locomotives and automobiles.
  2. Light Industry needs less capital, less number of workers and its finished products are light in weight. Examples: Electric goods, TV sets and sewing machines.

(b) On the basis of source of raw materials, industries can be classified as agro-based, mineral-based, animal-based and forest-based industries.

  1. Agro-based Industries are those which depend on agriculture for the supply of their raw materials. Examples: Sugar, jute, cotton, vegetable oil and food processing industries.
  2. Mineral-based Industries which receive their raw materials from minerals. Examples: Iron and steel, aluminium, cement and shipbuilding industries.
  3. Animal-based Industries depend on animals for their supply of raw materials. Examples: Woollens, silk, dairy products, poultry, hides and skins and leather industries.
  4. Forest-based Industries which receive their raw materials from the forest products. Examples: Paper, cardboard, tanning of leather, lac and timber industries.

Some of the pharmaceutical industries also depend on forest products and medicinal plants for the manufacture of drugs.


Classification On The Basis Of Management Of Industries

  1. Private Sector Industries are managed and owned by individual industrialists or firms manufacturing engineering and electronic goods.
  2. Public Sector Industries are owned and controlled by State or Central Governments. These industries comprise public utilities like railways, transport services, post and telegraph, refineries, irrigation projects and defence establishments. Examples: Companies like Bharat Heavy Electricals Limited, Hindustan Aeronautics Limited and Electronic Corporation of India.
  3. Joint Sector Industries are jointly managed by the private firms and the State or Central Government. Examples: Oil India Limited.
  4. Cooperative sector industries are owned and managed on cooperative basis by those who are producers of raw materials. Example: Sugar mills run by farmers producing sugarcane.

Classification on the Basis Of Size Of Industries

On the basis of size, the industries can be classified as

  1. Large-scale Industries which employ large number of workers in each unit and produce on a large scale with huge investment on raw material and machinery. Examples: Automobile and iron and steel.
  2. Medium-scale Industries employ neither too large nor too small number of workers. Examples: Cycle, radio and paper mills.
  3. Small-scale Industries are small industries run by individuals in which a few workers are employed and goods produced are mostly for daily consumption. Examples: Rice mill, flour mill and bakery.

Other Types Of Classification Of Industries

(a) On the basis of location:

  1. Cottage Industry — Basically the term cottage industry means business activity carried on at home. It is essentially a small-scale unit in which skilled artisans and craftsmen work with the help of family members and make various articles of wood, brass, ivory and stone. The other products of cottage industry are carpets, hand-woven sarees and decorative items of sandalwood. Cottage industry is grouped into village industry, handloom and khadi industry, coir industry and handicraft industry.

(b) On the basis of finished product or function:

  1. Basic Industry is the one on which other industries depend for their manufacturing. Examples: Iron and steel industry is the basic or key industry for almost all the important industries.
  2. Secondary or Consumer Industry converts the raw materials into primary goods for direct use by the consumers. Examples: Bakeries, paper, textiles and sugar.
  3. Tertiary Industries are public utility-based services like transport, roads and railways which help other industries.
  4. Ancillary Industries are industries which manufacture spare parts and components for big industries like buses, aircraft, heavy electrical industry, engines and locomotives.

(c) Labour-intensive industries are industries which require huge labour for running the industry. Examples: Shoe-making, bidi-making and firecracker industry.

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© 2014 Rachit Bhargava

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