Licensing in the Industries sector is governed by the licensing exemption notification issued by Govt. of India on July 25, 1991, under the Industries (Development and Regulation) Act, 1951. In SSI, there are virtually no licensing restrictions. No industrial license is required except in the case of 6 product groups included in compulsory licensing (these products groups mainly cover products that can only be made in the large sector).
But if a small-scale unit employs less than 50/100 workers with/without power then it would not require a license from the Govt. of India even for the 6 product groups covered in licensing under Schedule II of the notification.
Subject to this, an entrepreneur can set up an SSI unit anywhere in the country without any restriction. The units are, of course, subject to the locational/land use and zoning restrictions in force under the local laws.