Industry refers to an economic activity that is concerned with production of goods, extraction of minerals or the provision of services. Thus we have iron and steel industry (production of goods), coal mining industry (extraction of coal) and tourism industry (service provider).
Industries can be classified on the basis of raw materials, size and ownership.
Raw Materials: Industries may be agro based, mineral based, marine based and forest based depending on the type of raw materials they use.
Agro Based Industries: Agro based industries use plant and animal based products as their raw materials. Food processing, vegetable oil, cotton textile, dairy products and leather industries are examples of agro-based industries.
Mineral Based Industries: Mineral based industries are primary industries that use mineral ores as their raw materials. The products of these industries feed other industries. Iron made from iron ore is the product of mineral based industry. This is used as raw material for the manufacture of a number of other products, such as heavy machinery, building materials and railway coaches.
Marine Based Industries: Marine based industries use products from the sea and oceans as raw materials. Industries processing sea food or manufacturing fish oil are some examples.
Forest Based Industries: Forest based industries utilise forest produce as raw materials. The industries associated with forests are pulp and paper, pharmaceuticals, furniture and buildings.
Size: It refers to the amount of capital invested, number of people employed and the volume of production. Based on size, industries can be classified into small scale and large scale industries. Cottage or household industries are a type of small scale industry where the products are manufactured by hand, by the artisans. Basket weaving, pottery and other handicrafts are examples of cottage industry. Small scale industries use lesser amount of capital and technology as compared to large scale industries that produce large volumes of products. Investment of capital is higher and the technology used is superior in large scale industries. Silk weaving and food processing industries are small scale industries. Production of automobiles and heavy machinery are large scale industries.
Ownership: Industries can be classified into private sector, state owned or public sector, joint sector and cooperative sector.
Private Sector: Private sector industries are owned and operated by individuals or a group of individuals. The public sector industries are owned and operated by the government, such as Hindustan Aeronautics Limited and Steel Authority of India Limited.
Joint Sector: Joint sector industries are owned and operated by the state and individuals or a group of individuals. Maruti Udyog Limited is an example of joint sector industry.
Co-operative: Co-operative sector industries are owned and operated by the producers or suppliers of raw materials, workers or both. Anand Milk Union Limited and Sudha Dairy are a success stories of a co-operative venture.