The A&N Islands are still at the infant stage of industrial development and have been declared as an Industrially Backward Region Category-'A' by the Government of India. The pace of industrial growth in the A&N Islands has been slow mainly due to the locational disadvantages and lack of infrastructural facilities.

    There are 1172 small scale industrial units in this UT as on 31.3.96. The type of Small Scale Industries and its geographical distribution has been shown in Annexure -I. The growth of the industries since 1978 has been shown in Annexure-II. The total employment generated in the industries sector is around 11000. Besides, there are five medium scale unit out of which four are registered with the Director General of Technical Development (DGTD) is shown in Annexure -III. There are no large scale industries in this UT. Three of the medium scale units are engaged in veneer and plywood. One unit is engaged in wood sawing and one unit in production of industrial gases viz., oxygen and nitrogen. These include the Chatham saw mill in Government Sector.


    Industrialisation is a "sine qua non" of economic progress. No other activity in the modern world is more closely linked with or more adequately reflects the status of a country's development. The reforms process and new industrial policy initiated by the Government of India in the year 1991 has seen a major shift towards economic liberalisation covering all segments of the economy including industries, finance, domestic and foreign trade and foreign investment. The reforms include major policy changes such as delicensing of a large number of Industries, opening of various sectors for private investment, and automatic approval of foreign investment in a number of fields. These new policy initiatives require the state government to play a major role in catalysing foreign and domestic investment in diverse areas, facilitate reforms process in the matters relating to States and U.T.'s for realising the policy parameters.

    The A&N Administration had formulated an Industrial Policy in the year 1988 which helped in creating investment in Small and Tiny Sector. However the Industrial growth was very modest and slow in view of the absence of attractive package of incentives and concessions to new industrial ventures. In view of these new developments and changing economic scenario, the A&N Administration has pronounced a new Industrial Policy-1996. The main policy resolutions of the new Industrial Policy are :-

    • To bring in line the Industrial Policy of the A&N Administration with the new industrial policy of the Government of India.
    • To evolve an integrated approach towards the industrial development of the Island. The policy seeks to have a balanced development of industries with special focus on the Tiny, Cottage & SSI Sector giving emphasis on the economic and commercial exploitation of the natural resource of the Island in such a manner so as not to disturb the overall ecological balance of the region but at the same time ensure maximum value addition within the Islands. Industries in the large and medium sector set up for the development of infrastructure and in major thrust areas would also been encouraged.
    • To promote industries which use locally available raw material to produce high value added products.
    • To enhance the existing infrastructural facilities to stimulate faster growth of industry.
    • To promote industrial growth keeping in mind the interest of the local people in the matter of employment opportunities and gainful self employment.

    Comparative Advantages and Disadvantages of the Territory:

    The U.T. of A & N Islands has certain distinct advantages for development of industries as detailed below:-

    (a) Advantages:

    1. The territory provides peaceful work environment due to very conducive labour relations and excellent law and order situation.
    2. The Islands are fast emerging as a major tourist attraction because of their historical background related to independence movement. Having an extensive scenic beauty with rich flora and fauna, they attract tourists both domestic and foreign, thereby offering significant potential for investment in tourism related activities.
    3. The Islands have a long coastline of 1912 Kilometers and vast marine resources opens immense potential for aquatic and marine products like prawns, tunas, sharks, lobsters and shrimps. The territory is still virgin for exploitation of fish species for international markets in very large quantities.
    4. The Union territory is strategically located as far as access to international markets of South East Asian countries by being geographically closer as compared to the mainland markets of the Nation.
    5. Being a pollution free territory it offers great potential for electronics and software industries.

(b) Disadvantages:

  1. Undulating terrain and numerous small islands of the territory hinder transport and communication, within the territory. Being situated far off from the mainland, transport and communication between the mainland and the island pose a perennial problem.
  2. Forest covers 86% of the total area of the territory. Though forestry provides a major state revenue, there is a limited scope for further exploitation as the environmentally fragile does not allow increased timber extraction for industrial use.
  3. The Islands have a very limited infrastructure related to industrial growth. In the absence of thermal and hydel projects the per unit cost of production of electricity is very high and power intensive units find it difficult to have assured power for industrial use.
  4. Though a number of technical and professional institutions have been set up recently, availability of skilled manpower is still limited.