The Impact of Trade Liberalization on Industrial Growth of India: An Empirical Investigation

This paper examines impact of trade liberalization on industrial growth of India. The research problem is expressed as “To what extent does trade liberalization or openness of the economy influence industrial growth of India?” To identify the impacts of trade liberalization, total time period, 1970-2010, is divided into two sub periods of before trade liberalization i.e. (1970 to 1990) and after trade liberalization i.e. (1991 to 2010). The variables identified in the main objective of the study are tested hypothetically, and quantitative analytical methods are applied to make accurate and reliable conclusions. Graphical presentations and regression analyses are used to assess the degree of relationships among variables concerned. Further to test the structural changes in the country, the Chow test is applied. Findings of the study confirm that there is no evidence that the structural changes in industrial growth rates have been happened during the last four decades due to trade liberalization in India.