India's manufacturing landscape has changed dramatically since the mid-1980s. Drawing on Annual Survey of Industries (ASI) data and using the Location Quotient (LQ) approach, this study traces how industrial activity shifted from a more evenly spread, policy-guided pattern in the pre-reform years (1985-90) to a market-driven concentration after the economic reforms of 1991. The analysis tracks major industrial states from 1985 to 2018, examining trends in fixed capital, output, employment, and the number of factories. The findings show a clear shift: after liberalisation, manufacturing activity increasingly clustered in the western and southern states—particularly Gujarat, Maharashtra, Tamil Nadu, and Haryana, while, many northern and eastern states did not keep pace. Economic reforms tended to favour capital-intensive industries and regions that already had better infrastructure, stronger institutions, and a more investment-friendly environment. As a result, inter-state disparities widened over time. Overall, the evidence points to the continued presence of a core–periphery structure in Indian manufacturing. These patterns underline the need for policies that respond to regional differences, especially those aimed at strengthening industrial clusters, improving infrastructure in lagging regions, and designing support systems that make growth more inclusive across states.
Dr. Mankirat (2026) studied this question.