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What are the factors affecting location of industry?

by Team Goseeko

Factors affecting location of industry depends on their nature of business. Such nature of business may be production, trade, service providers, size, money involved, seasonal/permanent etc. Further, industry is a group of companies that are related based on their primary business activities. Thus, industry classifications are typically grouped into larger categories called sectors. Investors and economists often study industries to better understand the factors and limitations of corporate profit growth.

Hence, some of the important factors that affect the location of industry are

Location of industry

1. Large number of resources

Firstly, large number and easy reach to resources affect on location of an industry. Village industries, small scale industries are located where cheap labor is available in large numbers. Furthermore, the iron industries are established in Jamshedpur as it is rich in iron.

2. Large number of labor for labor intensive industry

Secondly, it affects on location of industry that need large number of labor . The industry can get large number of labor at less cost. Bangladesh and India etc. has many industries where labor engaged is large.

3. Large amount of fund for capital intensive industry

Further, easy and comfortable availability of loan for new and existing industries leads to promotion of more industries. For instance, Govt. of India started many schemes for promotion of industries. MUDRA loan, start-up India, make in India etc. are some of the examples.

4. Market research

Further, industry will establish in those areas where it can easily reach the market. It will help them to survive and grow in the market.

5. Transport

Moreover, here should be good communication and transportation link for transporting the products to the market place from the place of production.

6. Availability of resources

Additionally, Energy like electricity, gas, internet etc. should be available in the place where the industry is established.

7. Large areas of land

Finally, an industry needs large estate to set up its production unit and will establish in those areas where large area of land is available.

The above discuss highlights how different factors determines the location of industry.

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