The development of industrial clusters as a constructive channel of industrial infrastructure has attracted the attention of policymakers in recent years. Governments adopt ‘cluster development’ as an approach for industrialisation to reap the benefits of agglomerations through transformation of the traditional systems of activities to new networks ready for competition and innovation. There are many explicit advantages associated with industrial clusters and in a globalised economy in which global value chains link companies across borders, industrial clusters have become an important element of regional innovation systems in the industrial economy of any country as they enable the enterprise to enjoy the benefits of economies of scale in production and distribution. It is in the context, the paper attempts to explore select works on industrial clusters and agglomeration economies and the resultant effects on regional industrial development.