[2] As a result of the policy, businesses preferred setting up industrial locations closer to the coastal trade Indian states like Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Andhra Pradesh and markets in the cities like Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad, and Pune.
The policy took away the competitive advantage of the eastern parts of the country, and benefited the western, southern, and northern regions.
The finance minister T. T. Krishnamachari also equalised the freight, which greatly benefited the cement manufacturers in the South Indian states, as limestone and dolomite became cheaper to transport from North India.
[6] The sufferers of this policy were the states of West Bengal, Jharkhand (then Bihar), Madhya Pradesh, Chhattisgarh and Odisha.
In 1996, the Commerce & Industry minister of West Bengal complained that "the removal of the freight equalisation and licensing policies cannot compensate for the ill that has already been done".