The industries are generally classified on the basis of size, raw-materials, products and ownership.

1. On the basis of size: On the basis of size, industries can be classified into three categories.

(a) Cottage Industry: This is the smallest unit of manufacturing. Only family members, with small capital, use locally obtained raw materials to make ordinary goods. They use traditional equipment and sell their products in the local market. They manufacture cloth, furniture, earthen pots, shoes, etc. 

(b) Small – Scale Industry: Local raw – materials are used in this type of industry. Some skilled and unskilled workers operate simple tools which run and function by power. These industries are found in densely populated or developing countries. Total investment in the plant and machinary does not exceed 1 crore. 

(c) Large – Scale Industry: Large – scale industries require different types of raw materials, means of power, huge market, skilled workers, high technology and large amount of capital. Cement, cotton, petrochemicals, iron-steel industries are some examples.

2. On the basis of Raw – material: The industries are further classified into five categories.

(a) Agro – based Industries: The plants for which agricultural produce is essential for industrial outputs or productions are called agro – based industries. Cotton textile, silk, jute, beverages (tea, coffee, cocoa), food processing and vegetable – oils are some of its examples.

(b) Mineral – based industries: In this type of industries, minerals are used as raw materials. Most of these industries are large-scale industries. Iron and Steel industry, machine and tools industry, etc. are some of its examples.

(c) Chemical – based industries: In these industries, naturally – obtained chemical minerals are used. Petrochemical indsutry, fertilizer industry, paint industry, etc. are its examples.

(d) Forest – produce – Based Industries: In these industries, forest-produce is used as raw material. For example-paper and pulp industry, furniture industry, match-stick making industry, etc. 

(e) Animal – Based Industries: The raw materials used in leather industry and woollen textile industry are obtained only from animals.

3. On the basisi of Ownership: These types of industries are divided into three categories. 

(a) Public Sector Industries: These types of industries are subject to government control. Many industries in India are under the public – sector. Most of the industries in the communist countries are government owned. 

(b) Private Sector Industries: The private investors have the ownership of these industries. Most of the industries in capitalist system are in private sector. 

(c) Joint Sector Industries: These types of industries are operated by joint companies or by joint efforts of private and public sector.