Location of Localization:

Location of industry tries to answer the key economic question "where to produce". Where an industry should be located is an important decision to be taken because the success or failure of the industry may depend on the location chosen. It involves deciding on the area that an industry should be sited. In siting an industry, several factors may be considered which may include the following:

(i) Closeness to the Source of Raw Materials

Cost of production of industries include both costs incurred in purchasing and transporting the raw materials to the industry. When an industry is located close to the source of its raw materials transportation costs are reduced especially in the case of bulky raw materials

(ii) Closeness to Source of Power

A key necessity to industry is power. In most cases source of power from the national supply is cheaper. Therefore when locating an industry the owner considers availability of power for easy operation.

(iii) Supply of Labour

Another important factor of production is labour. Unskilled labour may easily be found at all places but not specialized or skilled labour. Where the industry is located if suitable labour is not available then it should be attracted from other sources at higher costs.

(iv) Closeness to Market

When goods are produced they should be sold. This makes the decision to site industries close to trading centres very critical and accounts for many industries crowding around established trading centres. This is particularly necessary if the goods are bulky to transport to the market.