Environment Laws

Guidelines on Siting of Industries: An Overview

calendar21 Mar, 2023
timeReading Time: 5 Minutes
Guidelines on Siting of Industries: An Overview

The siting of industries refers to the process of selecting a suitable location for the establishment of an industrial plant or facility. Siting is a critical step in the development of any industrial project as it significantly impacts the environmental, social, and economic aspects of the project. The siting process involves identifying and evaluating potential sites based on various factors such as access to raw materials, transportation facilities, availability of utilities, land availability and cost, labour availability, environmental and social impact, and regulatory requirements. The goal of the siting process is to identify an optimal location in terms of economic feasibility, environmental sustainability, and social acceptability.

This is crucial as it can have significant environmental, social, and economic impacts. The siting process should consider the potential impact of the industrial project on the environment and the local community, including factors such as air and water pollution, noise, traffic, and waste management. The siting process should also involve consultation with stakeholders, including local communities and environmental groups, to ensure that the project is socially acceptable and meets the local community’s needs.

Siting Guidelines for Industries

The Siting Guidelines for Industries includes the necessary steps that must be taken to minimise the possible adverse effect on the environment.

  • The Industrial Policy Statement of July 1980, had addressed the need for preserving ecological balance and improving living conditions in the urban centres.
  • Industries are being setup as per the Siting Guidelines for Industries based on access to the market, raw material availability, transport facilities and such other techno-economic considerations are recognised as an important criterion for setting of industry.
  • To prevent, air, water and soil pollution arising out of industrial projects, the Licensing procedure requires to obtain clearance from Central and State Air and Water Pollution Control Boards.
  • According to this procedure for the select group of industries, the Letters of Intent (LoI) should be converted to industrial licences.
  • The State Department of Environment is the competent authority for approval of project sites from environmental angle.
  • A half-yearly progress report on installation of pollution control devices is to be submitted to the respective State Pollution Control Boards by the entrepreneur.
  • The Environment Impact Assessment (EIA) and Environment Management Plan (EMP) are required to be submitted depending upon the nature and location of the project.

Factors to be considered as per the Siting Guidelines for Industries

The siting of industries is a complex process that involves evaluating various factors to identify a suitable location for establishing an industrial plant or facility. The following are some of the factors that need to be considered:

  • Availability of Raw Materials: The availability of raw materials is an essential factor as it affects the cost of production. Industries that require large quantities of raw materials should be located near the source of the raw materials to minimize transportation costs.
  • Access to Transportation Facilities: Industries should be located near transportation facilities such as highways, railways, and ports to transport raw materials and finished products easily.
  • Availability of Utilities: The availability of utilities such as electricity, water, and gas are critical in the siting. Industries should be located near areas with a reliable supply of utilities to ensure uninterrupted operations.
  • Land Availability and Cost: The availability and cost of land are essential factors in the siting. Industries should be located in areas with ample land for expansion, and the land cost should be reasonable.
  • Labour Availability: The availability of skilled and unskilled labour is an important factor in the siting. Industries should be located in areas with sufficient skilled and unskilled labour.
  • Environmental And Social Impact: The industrial project’s potential environmental and social impact should be evaluated before selecting a site. The siting process should consider factors such as air and water pollution, noise, traffic, and waste management.
  • Regulatory Requirements: The regulatory requirements for industrial projects vary depending on the type and scale of the project. Industries should be located where they can comply with regulatory requirements such as environmental clearance and zoning regulations.

Reason for Siting Industries in Urban Area

Industries are sometimes located in urban areas due to several reasons, including:

  • Access to Markets: Urban areas often provide access to larger and more diverse markets for industrial products, making it easier for industries to reach customers and increase sales.
  • Availability Of Infrastructure: Urban areas have well-developed infrastructure such as roads, railways, airports, and ports that provide easy access to transportation, making it easier for industries to import raw materials and export finished goods.
  • Access to Skilled Labour: Urban areas have a larger and more diverse workforce, providing industries with access to skilled labour that is necessary for their operations as per the Siting Guidelines for Industries.
  • Access to Technology and Innovation: Urban areas are often centres of innovation and technology, providing industries with access to new ideas, technologies, and expertise that can help them improve their products and processes.
  • Proximity to Suppliers: Urban areas often have a higher concentration of suppliers and service providers, which can reduce transportation costs and improve supply chain efficiency.

However, the siting of industries in urban areas can also lead to negative impacts such as environmental pollution, traffic congestion, and reduced quality of life for nearby residents. Therefore, it is important to carefully evaluate the potential impact of an industrial project on the environment and local community before deciding to site it in an urban area.

Importance of Siting Guidelines for Industries

The siting of industries is an important aspect of industrial development, and its importance can be summarized as follows:

  • Efficient Use of Resources: The siting can help to optimize the use of resources such as land, energy, and water. By locating industries close to sources of raw materials, transportation infrastructure, and utilities, the overall efficiency of the industrial process can be improved, reducing waste and increasing productivity.
  • Job Creation: The siting can create job opportunities for residents. By providing employment opportunities, industries can contribute to the region’s economic development and improve the local community’s standard of living.
  • Regional Development: The siting can promote the region’s development by attracting new investment, generating tax revenue, and stimulating economic growth. This can help to create a more vibrant and sustainable local economy.
  • Technology Transfer: The siting can facilitate the transfer of technology and knowledge to the local community. By locating industries in areas with a strong knowledge base, industries can tap into the expertise of local institutions, universities, and research centres, helping to accelerate innovation and promote technological progress.
  • Environmental Protection: The siting can help to protect the environment by reducing the distance that raw materials and finished products need to travel, minimizing transportation-related emissions, and reducing the overall carbon footprint of the industrial process.

In summary, the Siting Guidelines for Industries plays a crucial role in industrial development and can significantly impact the region’s economic, social, and environmental sustainability. By carefully considering the various factors that influence the siting process, industries can optimize their operations, create job opportunities, stimulate regional development, promote technology transfer, and protect the environment.

Regulation Governs the Sitting of Industries

The regulation that governs the sitting of industries varies depending on the country and jurisdiction. In many countries, industrial siting is regulated through environmental laws and regulations that aim to protect the environment and public health.

In India, the siting of industries is regulated by the Environmental Impact Assessment (EIA) Notification 2006, issued under the Environment (Protection) Act, 1986[1]. The EIA Notification requires industries to undergo a comprehensive environmental assessment before commencing operations and sets out criteria for the siting of industries based on their potential environmental impact.

Similarly, in the United States, the siting of industries is regulated by various federal and state environmental laws and regulations, such as the Clean Air Act, Clean Water Act, and the Resource Conservation and Recovery Act. These laws require industries to obtain permits and comply with various environmental standards and regulations before operating. The specific regulations and requirements for industrial siting will depend on each country or jurisdiction’s legal framework and regulatory environment.


In conclusion, the siting of industries is an important aspect of industrial development. It involves carefully considering various factors, such as access to resources, transportation infrastructure, and environmental impact. An effective siting of industries can optimize resource use, promote regional development, create employment opportunities, facilitate technology transfer, and protect the environment. However, the siting process must comply with relevant regulations and involve effective community engagement to ensure that the interests and concerns of the local community are considered. By following best practices for industrial siting, industries can establish a positive relationship with the community, minimize their environmental impact, and contribute to the region’s sustainable development.

Also Read:
Industries And Sectors That Have EC Exemption

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