Authoritative reports confirm that small industries have tended to concentrate in the vicinity of

large industries or in metropolises and big cities. This "spatial concentration" of the SSIs

of a certain product is called Cluster. The pull of the market, availability of physical and

social infrastructural facilities and skilled labour have been major facilitating factors.

The setting up of large public sector / private sector undertakings in some places

has encouraged growth of small-scale industries in those areas (e.g. Bangalore, Rourkela,

Ranchi, etc.) to manufacture ancillary products and to provide auxiliary services.


Over the years, small units have exhibited significant growth in some new towns

and cities. Government Support Programmes, Entrepreneurship, raw material availability,

improved infrastructure, increasing demand and a lot of other factors have contributed to

this phenomenon. A major aspect of "spatial concentration" of SSI is that clusters of certain

product lines have come up.


The clusters of some selected industries, according to a study by the NCAER, New Delhi,

in some areas are as indicated below (Product Group - District/Region):


Woollen & Cotton Hosiery - Tirupur, Ludhiana, Calcutta, Delhi
Sports Goods - Meerut, Jullundhur
Handtools - Jullundhur, Nagaur
Glass and Ceramics - Khurja, Farukkabad
Locks - Aligarh
Scientific Instruments - Ambala, Ajmer
Safety Matches - Sivakasi
Bicycles & Parts - Ludhiana
Brass Parts - Jamnagar
Diesel Engines and Parts - Kolhapur, Agra, Rajkot, Coimbatore, Ghaziabad
Electronics - Bombay, Pune, Bangalore, Delhi
Domestic Electrical Appliances - Bombay, Delhi
Wall Clocks Morvi


The UNIDO report on 'Restructuring and Modernisation of Small Medium Enterprise Clusters

in India' points out that these clusters need to expand export markets and for this purpose

need to network with both domestic and overseas clusters in order to become strong and

global sub-contractors for industrial clusters in foreign countries. Quality standards and

technological up-gradation are of utmost significance in this endeavour. Networking through

clusters ensures ready markets, at the same time adapting SMEs to be internationally competitive.

Industrial clusters in Italy survived and prospered through difficult times. SME clusters in India

may follow the Italian experience.


Networking can take several forms: training of entrepreneurs and managers;

supply of inputs (raw materials, components or intermediates); transfer of technology;

and marketing tie-up. In Andhra Pradesh, for instance, the Toscana cluster from Italy,

through Toscana Progetti, has outlined some critical areas in which it could help upgrade

the leather industry: improving design departments, productive capacities of enterprises,

promoting the availability of shoe components and setting up links with service

centres located in countries with better technological development.



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