Industrial Location in Post-Reform India: Patterns of Inter-regional Divergence and Intra-regional Convergence SANJOY CHAKRAVORTY Where do new industrial investments locate, and what factors drive the industrial location decisions? Do these investments follow the model of ‘divergence followed by convergence’ suggested by the cumulative causation, agglomeration economies, and transport- costs approaches? These questions are examined with district-level data from India for the pre- and post-reform periods using: first, tables and maps of concentration and clustering, aggregated for all industry and disaggregated into five sectors (Heavy Industries, Chemicals and Petroleum, Textiles, Agribusiness, and Utilities), and second, logistic and OLS/Heckman selection regression models for these six elements. The data provide solid evidence both of inter-regional divergence and intra-regional convergence, and suggest that ‘concentrated decentralisation’ is the appropriate framework for understanding industrial location in post-reform India. The idea of inter-regional divergence followed by convergence is one of the cornerstones of the regional development literature. It is expected that inter- regional inequality (expressed typically in terms of per capita regional income or output) increases during the early years/decades of industrial development, being concentrated in metropolitan areas, and begins to decline at some later indeterminate point. This approach includes the pioneering work of Perroux [1950], Myrdal [1957], and Hirschman [1958], through the writings of Williamson [1965], Friedmann [1973], and Alonso Sanjoy Chakravorty, Associate Professor, Department of Geography and Urban Studies, Temple University, 310 Gladfelter Hall, Philadelphia, PA 19122, USA; email: sanjoy@temple.edu. This study was made possible through a grant from the National Science Foundation (NSF SBR 9618343) and a study leave granted by Temple University. The author is indebted to Somik Lall, Michael Leeds, two anonymous referees, and to the many individuals in India who gave time and information. They are not, of course, responsible for anything written here. The Journal of Development Studies, Vol.40, No.2, December 2003, pp.120–152 PUBLISHED BY FRANK CASS, LONDON