Classification of Industries

Industries can be classified on different basis. Classification of industries on the basis of five criteria has been given.

1. Sources of Raw Material

  1. Agro-based Industries: Agricultural products used as raw materials. Examples - Cotton textile, jute, sugar and paper industry

  2. Mineral based Industries: Minerals are used as raw materials. Examples - Iron and steel, chemical and cement industry

2. Ownership

  1. Public Sector: Owned and managed by Government. Examples - Bokaro iron and steel plant, Chittaranjan locomotive works

  2. Private Sector: Owned and managed by an individual or a group as a company. Examples: Tata Iron and Steel, J.K. cement industry, Appolo Tyres

  3. Joint Sector: Owned jointly by public and private sectors. Examples - Maruti Udyog

  4. Cooperative Sector: Owned by cooperative society of raw material producers. Examples - Sugar industry in Maharashtra, Amul (Gujarat) and IFFCO (Kandla)

3. Function or Role

  1. Basic Industry: Finished products of basic industry are used as raw material for other industries. Examples - Iron and Steel and petro-chemical industries

  2. Consumer Goods Industry: Finished products of this industry are directly used by individuals. Examples - Toothpaste, soap, sugar industry

4. Size of Industry

  1. Large Scale Industry: Huge investment, heavy machinery, large number of workers, large factory, 24 hour’s operation. Examples - Iron and steel, oil refineries

  2. Small Scale Industries: Small investment, small factory, few factory workers. Examples - cycles, electrical goods industry

  3. Rural and Cottage Industries: Owned by family members, small machine at homes. Examples - Jewellery, handicrafts, handlooms, art work

5. Weight of Raw Materials and Finished Products

  1. Heavy Industries: Both raw material and finished products are heavy and bulky, high transport cost. Examples - Iron and steel, BHEL (Haridwar), heavy electrical like generator

  2. Light Industries: Both raw material and finished products are light in weight, low transport cost. Examples - Watches, readymade garments, toys, fountain pens.

This is not necessary for any particular industry to be included only in one category. Depending upon the classification, the same industry can become an example of different types of industries. For example, Bokaro Iron and Steel plant is a mineral based industry. It is in public sector. It is a basic industry. It is large scale industry and also an example of heavy industry.

Agro-based Industries

Textiles, sugar, paper and vegetable oil industry are some of the examples of agro-based industries. These industries use agricultural products as their raw materials.

Textile industry is the largest industry in the organized sector. It comprises of (i) cotton textiles, (ii) woolen textiles, (iii) silk textiles (iv) synthetic fibres and (v) jute textile industries. Textiles has been a major component of the industrial sector. It accounts for nearly a fifth of the industrial output and a third of the export earnings. In term of employment, it comes next only to agriculture sector.

Mineral Based Industries

Industries which use minerals as the raw material are called mineral based industries. Iron and steel industry is the most important among these industries. Engineering, cement, chemical and fertilizer industries are also important mineral based industries.