It is well known that economic activity benefits from agglomeration. Indian economic planners have recognized the importance of agglomeration and have attempted to create industrial clusters. However, their attempts have achieved only partial success. Lack of successful industrial clusters is a plausible reason for why manufacturing has not taken off in India. With the laudable objective of balanced regional development, Indian governments have tried to push cluster development to the hinterland and away from large urban centers. We hypothesize that the failure of clusters is due to their location in regions with low economic complexity. Our basic premise is that a cluster requires a threshold level of economic complexity before it starts benefiting from agglomeration. We intend to build a measure of economic complexity and test its relationship with cluster growth. Our work can potentially provide an answer to how the trade-offs between balanced development and agglomeration can be achieved: identify potential urban centers that are close to achieving the threshold of economic complexity and are the best candidates for concerted development efforts -  such as establishment of educational and research institutions and public undertakings and provision of incentives to private companies to attract investment. A concerted development of industrial clusters in such cities can lead to a more balanced regional development across India while facilitating the growth of manufacturing.