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Since coming to power in 2004, the coalition government of India, led by the Congress Party, has reiterated its commitment to deliver "development with a human face" and to address in particular the needs of the rural poor, largely excluded from the gains of faster growth during the last decade. This political context provides the backdrop for this study of development strategies designed to support rural small-scale industries, and their spatial implications. Using an historical perspective, three major periods are identified, starting with the policies of the 1950s which are considered quite innovative because of their comprehensive approach, notably their attention to balanced regional development, while promoting growth poles. The focus of these policies on inter-sectorial linkages (between agriculture and industry, between large- and small-scale industries, and also between traditional and modern types of small-scale manufacturing), as well as their consideration of broad demographic issues (e.g. migration, urbanisation) justify revisiting the debate on the role of small-scale industries within an overall development strategy. The major components of these polices are analysed for each period and situated with respect both to major development paradigms and to broad national development goals, taking into consideration their spatial repercussions. For instance, starting in the mid-1980s there was a gradual shift in the focus of support measures in favour of the more competitive segments of the small-scale sector, a decision which benefited the "modern" units, more likely to be located in urban areas, and more integrated into national and international markets than the "traditional" sector. The major relevance of this discussion is that it allows new insights into India's current political economy, at a time when it is pursuing market reforms and becoming increasingly integrated into global economic processes. It underscores the challenges facing policy-makers who are committed to promoting competition in the country, and who recognize at the same time that current industrial development, characterised by spatial polarisation, is increasingly marginalizing many regions and their populations.