Industrial clustering and location in India: Sectoral patterns of investments and employments

Industrial growth plays a vital role in driving regional progress, as inequalities primarily stem from diverse industries. This becomes particularly significant in the Global South, where wealth creation is a challenge, poverty is persistent and disparities are widening. India serves as a typical example, with skewed industrial distribution and non-inclusive development. Understanding industrial distribution is thereby essential in tackling the challenges of achieving balanced regional development. The paper investigates spatial distribution of industrial activity in India and finds that the interaction of different factors motivate industrial investments to choose already advanced regions like Gujarat and Maharashtra. Using a panel dataset spanning 37 years, the study analyses the different manufacturing sectors and the impact of socio-economic factors on industrial investment across 16 major states of India from 1980 to 81–2017–18. The results provide conclusive evidence of the determining influence of human capital, infrastructural benefits and the presence of diverse industrial activities on the distribution of industrial investments.