Chapter 14 · Economics

Indian Industries

Industrial History · Policies · Ratna Status · IIP · EPZ/SEZ · Schemes — SSC / Railway / UPSC / BPSC

Industry — Introduction
  • Conversion of primary products into secondary products
  • Process of production or manufacturing of goods
5.9%Industrial real GVA Growth FY 2024–25 (Economic Survey 2025–26)
25.8%Secondary Sector nominal GVA share FY 2024–25 (base 2022–23)

Industrial share in GDP was just 13% in 1950–51. Modernisation of the economy and increase in employment come via the industrial sector.

Consumer GoodsClothes, food items, sports goods
Capital GoodsMachines, equipment, tools
First Industrial Revolution (World)England
Industrial Sectors (By Ownership)
SectorDescription
Public SectorManaged, controlled, operated by the government
Joint SectorGovernment + Private partnership
Private SectorOwnership, control, management by a firm/individual/company
Cooperative SectorMember-owned, democratically controlled enterprises serving members' common economic interests

Dutt Committee reviewed industrial licensing; its recommendations informed the Industrial Licensing Policy announced in February 1970.

Iron and Steel Industry
Beginning of Production1870, by Bengal Iron Works Company (Kulti)
TISCO1907, Jamshedpur, Jharkhand
First Second-Plan Integrated PSU Steel Plant to Enter ProductionRourkela Steel Plant, 1959 (Odisha)
Aluminium Industry
First Aluminium IndustryJ.K. Nagar, 1937 (West Bengal)
SecondMuri, 1938 (Jharkhand)
NALCOEstablished 1981, Bhubaneswar (Odisha) — country's largest Bauxite-Aluminium project
BALCOIncorporated 1965; India's first public-sector aluminium company; major operations at Korba, Chhattisgarh
⚠ EXAM TRAP
BALCO is often confused for being related to steel due to its name — it is actually India's first PUBLIC SECTOR UNDERTAKING in the Aluminium industry.
Textiles Industry

One of India's oldest and most employment-intensive manufacturing industries.

Early Modern Cotton-Mill AttemptKolkata (1818)
First Successful Modern Cotton MillBombay Spinning and Weaving Company, Mumbai (1854), founded by Cowasji Nanabhai Davar
NicknameCity
Cottonopolis of IndiaMumbai
Manchester of IndiaAhmedabad
North India's ManchesterKanpur
South India's ManchesterCoimbatore
State with Most Cotton MillsTamil Nadu
Jute Industry (Golden Fibre)
  • India is a leading jute-producing country and the largest producer of jute goods; Bangladesh is a major competing exporter
  • First jute mill: 1855, Rishra, Kolkata
  • Largest jute producer state: West Bengal

International Jute Organisation: established 1984, HQ Dhaka; later succeeded by International Jute Study Group.

Silk Textile Industry
Beginning of Modern Silk Manufacturing1832, Howrah (by East India Company)
World Rank2nd largest producer (1st: China)
Largest Producer in IndiaKarnataka

Four principal commercial natural-silk varieties: Mulberry, Tasar, Eri and Muga; oak tasar is a form of tasar.

Other Industries
  • Consumer-electronics manufacturing began with radio sets in the 1950s; black-and-white TV production followed in the 1960s
  • Petrochemical industry: started by private sector in 1961
  • First public sector petrochemical unit: Indian Petrochemicals Corporation Limited (IPCL), 1969 (Vadodara)
  • Country's first super phosphate factory: Ranipet (Tamil Nadu)
  • First modern woollen textile mill: 1876 (Kanpur)
Industrial Policy, 1948
Announced6th April, 1948
MinisterShyam Prasad Mukherjee (Industry and Commerce)

Four Categories

  • Central Government's monopoly
  • New ventures only by state government
  • Industry of foundational importance
  • Small, private, and cooperative industries
Industrial Policy, 1956
Announced30th April, 1956

Industries divided into 3 categories: Government sector (17), Government + Private (12), Private.

Industrial Policy, 1970
AnnouncedFebruary, 1970

1970 Licensing Policy — Four Broad Categories

  • Core sector
  • Heavy-investment sector
  • Middle sector and unlicensed sector

Reform licensing and restrain concentration in large industrial houses; DICs were launched separately in 1978 following the 1977 policy.

Industrial Policy, 1980
Announced23rd July, 1980

Modernisation, technology upgradation, ancillarisation/nucleus plants, capacity utilisation and balanced regional development.

New Industrial Policy — LPG (1991)
Announced24th July, 1991
  • L — Liberalisation: major reduction of industrial licensing/regulation; licensing retained for selected industries
  • P — Privatisation (Nijikaran): Change in ownership/management of PSUs; direct sale of PSU companies
  • G — Globalisation: Integration of country's economy with world economy via trade and commerce
⚠ EXAM TRAP
MRTP Act (1969) was replaced by the Competition Act, 2002 — not amended, fully replaced. Both dealt with monopolistic/restrictive trade practices but under different frameworks.

New Public Sector Enterprise Policy 2021 strategic groups: Atomic Energy/Space/Defence; Transport/Telecom; Power/Petroleum/Coal/other minerals; Banking/Insurance/Financial Services.

Related Policies & Acts
New Manufacturing PolicyHistorical National Manufacturing Policy (2011): manufacturing share 25% of GDP and about 100 million additional jobs over roughly a decade; competitiveness, value addition and sustainability
MSMED Act2006 — promotes and facilitates MSME development

Industries Requiring Compulsory Licensing

  • Electronic aerospace and defence equipment
  • Tobacco manufacturing, Hazardous chemicals
  • Industrial explosives
  • Cigars, cigarettes, other tobacco products
Maharatna
Started2010
CriteriaNavratna status + foreign business presence + stock exchange listing
  • Average annual turnover of ₹25,000 crore (3 years)
  • Average net profit of ₹5,000 crore (3 years)
  • Average annual net worth of ₹15,000 crore (3 years)
14Maharatna Companies

IOC, ONGC, CIL, SAIL, NTPC, BHEL, BPCL, PGCIL, PFC, RECL, OIL, GAIL, HPCL, HAL

Navratna
Started1997
Score Requirement60 out of 100 points
Navratna Count (after GRSE elevation, June 2026)27 (26 at end-March 2025)

Scoring Parameters (6)

  • Earnings per Share; Inter-Sectoral Performance
  • Net Profit / Net Worth
  • Manpower Cost / Total Cost
  • PBDIT / Capital Employed
  • PBIT / Turnover
Miniratna (Category I & II)
Category-I MiniratnaCategory-II Miniratna
Profit in each of last 3 years; pre-tax profit ≥₹30 crore in one year; positive net worth and other conditions; capex autonomy up to ₹500 crore or net worth, whichever lowerProfit in each of last 3 years; positive net worth and other conditions; capex autonomy up to ₹250 crore or 50% of net worth, whichever lower
Current: 49 (March 2025)Current: 10 (March 2025)
⚠ EXAM TRAP
Ratna hierarchy from highest to lowest: Maharatna > Navratna > Miniratna Category-I > Miniratna Category-II — don't reverse the sequence.
Index of Industrial Production (IIP)
Estimated ByNational Statistical Office (NSO), monthly
Base Year2022–23 = 100 (new IIP series introduced June 2026)
SectorWeightage
Manufacturing76.062%
Mining11.053%
Electricity and Gas Supply10.865%
Water Supply, Sewerage and Waste Management2.020%
Nine Core Industries (2022–23 series; Iron Ore added July 2026)
Core IndustryWeightage
Refinery products—
Iron Ore (added July 2026)—
Electricity30.932%
Steel17.584%
Crude oil7.430%
Coal5.596%
Natural gas3.841%
Cement4.410%
Fertilisers2.731%
⚡ QUICK RECALL
Current 2022–23-base ICI has nine industries, including Iron Ore. Electricity has the highest weight (30.932%); Fertilisers the lowest (2.731%). Old eight-industry weights are historical.
Export Processing Zone (EPZ) & SEZ
Asia's First EPZ1965, Kandla (Gujarat)

Objective: To provide a suitable environment for the export of goods from the country.

Converted EPZ to SEZ1st April, 2000
SEZ Act Passed2005
Public Sector Companies That Were Privatised
Public Sector CompanySold to Private Sector Company
Modern Food IndustriesHindustan Lever Limited
BALCOSterlite Industries
Videsh Sanchar Nigam LimitedPanatone Finvest Limited (Tata Group)
MSME Revised Classification (Budget 2025–26)
EnterpriseInvestment (before April 2025)Current Investment Ceiling (from 1 April 2025)Turnover Ceiling (old/current)
Micro Enterprise₹1 crore₹2.5 crore₹5 crore / ₹10 crore
Small Enterprise₹10 crore₹25 crore₹50 crore / ₹100 crore
Medium Enterprise₹50 crore₹125 crore₹250 crore / ₹500 crore
⚠ EXAM TRAP
The Budget 2025-26 MSME revision roughly 2.5x'd the investment limits and 2x'd the turnover limits across all three categories — remember the pattern, not just isolated numbers.
Institutions Related to Small & Cottage Industries
InstitutionEstablished
Cottage Industries Board1948
Central Silk Board1949 (Act: 1948)
All India Handicrafts Board1952; disbanded 2020
All India Khadi and Village Board1953
Small Scale Industries Development Organisation1954
Khadi and Village Industries Commission1957
Regional Rural Banks1975
District Industries Centre1978
SIDBI1990
All India Handloom Board1952; disbanded 2020
Major Export Promotion Centers
CenterIndustry
KanchipuramSilk
SalemTextiles
SivakasiMatch Box
AmbalaScientific Instruments
JamnagarDyes, Petrochemicals
RajkotEngine Pump
Vapi (Ankleshwar)Chemistry
BareillyZari
BhagalpurKnitting
TiruppurHosiery and Knitting
MoradabadBrass Handicrafts, Metallurgy
SaharanpurWood Carving
LudhianaHeavy Machinery and Hosiery
SuratGems and Jewellery
GoaTourism, mining/mineral-based activity, pharmaceuticals and food processing
PanipatHandloom
BhopalHistorical Union Carbide pesticide-plant association and 1984 disaster, not a general current cluster label
AlleppeyCoconut Fibre and Products
JalandharSports Goods
Mon (Nagaland)Wood Products
NalbariBamboo Products
PinjoreMachine Tools
NagpurHandloom
VisakhapatnamFish Products
MeerutSports Goods
AligarhBrass Locks
AgraLeather, Footwear
KhurjaPottery
⚡ QUICK RECALL
Two cities are known for Sports Goods (Jalandhar and Meerut) and two for Handloom (Panipat and Nagpur) — remember there are duplicate industry-city pairs.
Key Industrial Institutions

National Investment and Infrastructure Fund (NIIF)

Established2015, with ₹40,000 crore
ContributionGovernment contribution/share 49% in NIIF AIF entities; balance raised from domestic and international investors

To expedite infrastructure projects.

National Productivity Council (NPC)

Established1958

Objective: To increase productivity in industries.

National Steel Policy2017
MSMED Act2006 (passed)
Schemes Related to Industrial Sector
SchemeStartedObjective
Make in India25 September 2014Promote investment and manufacturing in India
Start Up IndiaJanuary 2016Nurture innovation and startups ecosystem
Stand Up India SchemeApril 2016Bank loans for greenfield enterprises promoted by SC/ST and women entrepreneurs
Pradhan Mantri Mudra Yojana8 April 2015Collateral-free institutional credit for non-corporate, non-farm micro/small enterprises through eligible lenders
SAATHI SchemeOctober 2017Adopt modern, efficient textile technology in small industries
Power Tex India SchemeApril 2017Development of the powerloom sector
⚠ EXAM TRAP
Stand Up India supports greenfield enterprises promoted by SC/ST and women entrepreneurs (separate eligible groups); Start Up India supports the innovation/startup ecosystem.
Quick Summary / Reference Table
TopicKey Fact
Industrial Growth Rate5.9% (2024–25)
Secondary Sector nominal GVA Share25.8% in FY 2024–25 (2022–23-base series)
First Industrial RevolutionEngland
Dutt CommitteeReviewed licensing; recommendations informed February 1970 licensing policy
TISCO1907 | Jamshedpur, Jharkhand | Tata Iron and Steel Company
First Second-Plan PSU Steel Plant to Enter ProductionRourkela Steel Plant, 1959 (Odisha)
NALCO1981 | Bhubaneswar (Odisha) | Country's largest Bauxite-Aluminium project
BALCO1965; first public-sector aluminium company; major operations Korba, Chhattisgarh
Textiles — India's oldest industryOne of the oldest and most employment-intensive manufacturing industries
Early Modern Cotton-Mill AttemptKolkata (1818)
India's CottonopolisMumbai
Manchester of IndiaAhmedabad
Most Cotton Mills StateTamil Nadu
North India's ManchesterKanpur
South India's ManchesterCoimbatore
Jute — India's positionLargest jute-goods producer; Bangladesh a major competing exporter; first Indian mill: Rishra, 1855
Largest Jute Producer StateWest Bengal
Silk — India's position2nd largest producer (1st: China) | Largest producer: Karnataka
First Industrial Policy1948 | Announced 6 April 1948 | 4 categories
Industrial Policy 19563 categories: Govt (17), Govt+Private (12), Private
New Industrial Policy LPG24 July 1991 | Liberalisation, Privatisation, Globalisation
Strategic Groups (New PSE Policy, 2021)Atomic Energy/Space/Defence; Transport/Telecom; Power/Petroleum/Coal/minerals; Banking/Insurance/Financial Services
MRTP Act1969 | Replaced by Competition Act, 2002
Navratna — Started1997; minimum 60/100 plus eligibility; 27 after GRSE elevation in June 2026 (26 at end-March 2025)
Maharatna — Started2010 | 14 companies
Miniratna Category I49 (March 2025) | 3 years continuous profit | ₹30 crore in a year
Miniratna Category II10 (March 2025)
IIP Base Year2022–23 = 100; new series June 2026; monthly NSO/MoSPI
IIP — Manufacturing Weightage76.062%
Core IndustriesNine in 2022–23-base ICI; Iron Ore added July 2026
Highest Weightage Core IndustryElectricity (30.932%)
Asia's First EPZ1965 | Kandla (Gujarat)
EPZ to SEZ1 April 2000 | SEZ Act: 2005
NIIFEstablished 2015; proposed corpus ₹40,000 crore; Government share 49%, balance domestic/international investors
NPCEstablished 1958 | Increase productivity in industries
Make in India25 September 2014 | Promote investment and manufacturing
Stand Up India5 April 2016; greenfield bank loans for SC/ST and women entrepreneurs
Start Up IndiaJanuary 2016 | Nurture innovation and startups
PM Mudra Yojana8 April 2015 | Collateral-free institutional credit for non-corporate, non-farm micro/small enterprises through eligible lenders
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