Geographical Dispersal of the Manufacturing Industry in India

It is well known that industrial locations in India exhibit persistent geographical clustering, leading to a significant regional imbalance in formal sector industrial employment. In this paper, we present a geographical analysis of the manufacturing industry in India using plant locations, without reference to administrative boundaries. The focus of the study is the process of dispersal of location outside dominant clusters, and into areas of low industrialization. For an all India spatial–temporal analysis, we use location data for new completed plants for all industry types from Projects Today for the period 2002–2018. A case study of the automobile component industry is done using the plant-level directory of the Automobile Component Manufacturer’s Association (2016). We use the algorithm of Density-Based Spatial Clustering of Application with Noise (DBSCAN) to identify plant clusters and their properties. We show that industrial clusters transcend administrative boundaries. The automobile component industry clusters reside within the large all industry clusters, and have strong regional characteristics in the north and south of the country. While the agglomeration advantages offered by clusters remain a powerful centripetal force for new industrial locations at all times, periods of good economic growth and regional features are centrifugal forces leading to location dispersal to improve regional imbalances.