Ecology has been given importance in the state during the last few years. Industries becoming the cause of water or air pollution are not encouraged. Every industrial project has to be passed by the clearance of the Environment Protection Organization before its establishment.

In order to develop industrialization, a number of new policies were adopted by the state government like providing various incentives such as cheaper power, twenty five percent subsidy besides easier credit facilities through the State Finance Corporation and the nationalised banks for establishing new industries. Also, land was made available on 99 years low rate lease basis and new industries were exempted from sales or purchase tax. Concessions were also given on charges for transportation of raw materials from the nearest railhead outside the state beside provision of other marginal benefits. These concessions helped the state in establishing industrial houses.

Gagret, Parwano, Barotiwala, Baddi, Paonta Sahib, Mehatpur, Shamshi, Nagrota-Bagwan, Bilaspur, and Sansarpur Terrace are some of the industrial areas of the State at present. As the dust free climate of Himachal is extremely suitable for the setting up of electronic industries, many electronic complexes have been established at Solan, Mandi, Hamirpur, Shoghi, Raja ka Bagh, Chamba, Kala-Amb, and Taliwala.