The Department of Industry is the premier agency to spearhead the growth and development of the industries (Cottage, Small, Medium and Large Industries) including Foreign Direct Investments.

The five Divisions of the Department are Cottage and Small Industry Promotion Division, Large Industry Promotion Division, Industry Sustenance Support Division, Invest Bhutan and Industrial Park Management Division. The Department also acts as a Competent Authority through the Environment Service Section to implement environment regulations for the delegated as well as non-delegated industrial activities. 

The Department defines cottage-scale industries as those industries, whose initial fixed capital investment is less than Nu. 1 million and employ up to 4 people; and small-scale as those undertakings employing up to 19 people with fixed capital investment ranging from Nu. 1 to 10 million. The scale of industries, be it medium or large, depends on the level of fixed capital investment. Industries with a fixed capital investment between Nu. 10 and Nu. 100 million are categorized as medium industries whereas industries with a fixed capital investment of more than Nu. 100 million are categorized as large industries.