Unfolding Industrial Output: A Study of India’s Formal Manufacturing Sector

Investigation of economic development and growth has been at the forefront research (Denison 1962; Barro 1996). The idea focusing on industrial sector to drive a global phenomenon. process supplemented with several structural changes that an economy goes through. mainstream literature predicts opening up increases exports commodities based economy’s comparative advantage. One principal questions paper attempts is examine whether openness Indian resulted in expansion share export-oriented industries reduction import-competing industries' manufacturing output. analysis uses rich granular-level data formal sector. Furthermore, requires looking not only rate over particular period but also cumulative increase according different activities which may be labour or capital-intensive. using cluster-based decomposes into capital-intensive brings out important aspects how output produced. pattern capital intensity firms shows have systematically witnessed intensity. Factors such as incentives form subsidies, tariffs goods made access easier adopt advanced technology. Also today’s globalised world, pressure domestic remain competitive both external markets created grounds for adopting latest (more capital-intensive) techniques.