In India,  there is wide possibilities of industrial development but due to some problem we are far behind in comparison to the development nations.  The main problem faced by industries can be summarised as follows:

Problem of industries

  1. Under Utilisation of Capacity - It is estimated that,  in India 30-40℅ part of established production capacity remains unutilised.  Main reasons for this are paucity of raw material, energy and demand as well as government policy, labour  discontent etc.  This cause industrial stagnation. 
  2. Foreign competition - Due to the policy of liberalisation,  India has withdrawn all quantitative restrictions import  This is bound to result in intense competition with import in coming year forcing a number of industrial units to shut down.  The small scale industries cannot withstand competition from rich and technologically advanced multinational companies. 
  3. Scarcity of capital - The rate of capital formation is relatively low in India. Due to lack of capital most of the industries are not in the position of using new advance machine and technology.  Thus production cost remains high and they couldn't compete in the market. 
  4. Lack of Basic Amenities - Basic amenities such as power,  communication,  transport,  banking,  insurance for industrial development are not adequately available in India.  Inadequacy of these facilities create many problems in the development of industries.
  5. Industrial Sickness - Many industrial units, especially small units and traditional industries like Textiles, Jute, Sugar are sick. This is the effect of inefficient management. Neglecting the cost factor due to protective policy, absence of quality improvement and technological renovation also resulted in sickness. The number of sick units in constantly growing in India.
  6. Labour Problems - The progress of industrilaztion has been accompanied by increase in industrial disputes in India. Industrial dispute often leads to strikes and lock outs. Both of these activities lead to struggles disturbing the Peace of the industrial sector.  This effects industrial activity adversely leading to under-fulfilment of targets. 
  7. Higher Cost—Industrial production cost in India is much more in comparison with the international costs. Due to lack of skilled and efficient labour, backward technique, inefficient management, produccost remains high in India.
  8. Growing Dependence on Financial Institutions- Due to capital intensiveness of industries and high rates of corporate taxation, a large part of finance of such industries is provided by financial institutions. Industries squeeze their funds, which were originally established to direct the financial flow on the basis of national priorities. 
  9.  Problem of Centralisation—Industrial development has not been equal in different parts of the country. some states of India such as  Maharashtra, Gujrat, West Bengal and Tamilnadu have become industrially developed while some other states remained backward in industrial growth. This regional imbalance create many problems before industries.