(i) Adoption of superior technology that help to transform basic raw materials and intermediate goods into manufactured goods, and
(ii) Application of modern techniques of management.
Industrial development is used as a yardstick for measuring the level of economic development. All developed countries of the world have highly developed and diversified industrial sector. India possesses all the necessary conditions for industrial development. Along with vast and diversified natural resource endowments, its large population size provides cheap labour and huge market for manufactured goods. India was an industrially developed country before the advent of industrial revolution in Europe.
The history of industrialisation in India started with the establishment of cotton textile mill in Mumbai (Bombay) in 1854 with the predominantly Indian capital and enterprise. First jute mill was started at Risra near Kolkata (Calcutta) with Scottish capital and management in 1855. Coal mining in the Chotanagpur region also began about the same time. Subsequently, paper mill and chemical industries were started. The pig iron industry was started at Kulti in 1875. With the establishment of the Tata Iron and Steel Company at Jamshedpur in 1907, a new chapter in the industrial history of India was opened.
The growth of industry before the First World War was slow and holding. Indian industries were only to supplement the products of British industries. Further, only such industries were promoted which were not suited to Britain such as sugar and cement.
During and after the Second World War, the situation changed drastically. The war hindered movements of goods via sea routes and hence a liberal industrial policy was adopted, which gave impetus to industrial development.
Numerous industries came up such as steel, sugar, cement, glass, industrial chemicals and some engineering industries. Existing industries also expanded considerably during this period. The post-war inflation, and the partition of the country in 1947 adversely affected industries particularly jute and cotton textile industries organisation.