IMPACT OF IMPORT POLICIES ON DOMESTIC INDUSTRIES AND ECONOMIC GROWTH IN INDIA: A REVIEW OF PAST WORK AND META-ANALYTIC EVIDENCE

Abstract

Import policy is one of the most consequential instruments of economic governance in India, shaping the competitive environment faced by domestic industries and, through them, the country's growth trajectory. Since independence the country has moved from a regime of quantitative restrictions and high tariffs to one of progressive liberalisation following the 1991 balance-of-payments crisis. This paper reviews past empirical and theoretical work on how import policies affect domestic industries and economic growth in India, and situates that evidence within a broader cross-country literature. Following a meta-analytic review logic, the study synthesises firm-level, industry-level and macro-level findings, examines the transmission channels of competition, input access and technology diffusion, and compares the direction and magnitude of reported effects. The synthesis suggests that tariff reductions on final goods and intermediate inputs have generally raised productivity and output in manufacturing, while employment and regional outcomes are more heterogeneous. Methodological heterogeneity, endogeneity of policy, and publication selection remain important limitations. The paper concludes by identifying gaps for future meta-regression studies and by recommending that policy design pair liberalisation with labour, infrastructure and innovation support. The review also finds that publication selection and inconsistent reporting of standard errors limit the precision of any single pooled estimate, which underlines the need for transparent coding and replicable synthesis in this field.

Authors & Affiliations

* Corresponding Author. Author contact details are available in the published PDF article as per journal policy.

Keywords & Indexing Terms

Download Center

Indexing & Verification

G Google Scholar Check indexing visibility by DOI Crossref / DOI Verify permanent DOI record ORCID Author identifier support Open Access Free reader access Indexing Ready Scholar metadata compatible OAI-PMH Metadata harvesting ready Article Metrics Views & download analytics

Article Metrics

Metrics are indicative and may update periodically after indexing, downloads and citation tracking are enabled.

Article Integrity & Transparency

License & Copyright

© 2026 The Author(s). The author(s) retain copyright and grant the journal the right of first publication. This work is licensed under the Creative Commons Attribution-NonCommercial 4.0 International License .

How to Cite

PDF Preview

If the PDF preview does not load on your device, open the PDF directly or use the Download PDF button. Open PDF in new tab

Declarations

Publisher's Note

References

Showing first 3 references. Click “Show All References” to view complete list.

1. [1] P. Panagariya, "India in the 1980s and 1990s: A triumph of reforms," IMF Working Paper WP/04/43, Int. Monetary Fund, Washington, DC, USA, 2004.
2. [2] T. N. Srinivasan and S. D. Tendulkar, Reintegrating India with the World Economy. Washington, DC, USA: Peterson Institute for International Economics, 2003.
3. [3] J. Bhagwati and A. Panagariya, Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries. New York, NY, USA: PublicAffairs, 2013.
4. [4] I. J. Ahluwalia, Productivity and Growth in Indian Manufacturing. New Delhi, India: Oxford Univ. Press, 1991.
5. [5] P. Krishna and D. Mitra, "Trade liberalization, market discipline and productivity growth: New evidence from India," J. Develop. Econ., vol. 56, no. 2, pp. 447 462, 1998.
6. [6] P. Topalova and A. Khandelwal, "Trade liberalization and firm productivity: The case of India," Rev. Econ. Statist., vol. 93, no. 3, pp. 995 1009, 2011.
7. [7] P. K. Goldberg, A. Khandelwal, N. Pavcnik and P. Topalova, "Imported intermediate inputs and domestic product growth: Evidence from India," Q. J. Econ., vol. 125, no. 4, pp. 1727 1767, 2010.
8. [8] M. Amiti and J. Konings, "Trade liberalization, intermediate inputs, and productivity: Evidence from Indonesia," Amer. Econ. Rev., vol. 97, no. 5, pp. 1611 1638, 2007.
9. [9] R. Hasan, "The impact of imported and domestic technologies on the productivity of firms: Panel data evidence from Indian manufacturing firms," J. Develop. Econ., vol. 69, no. 1, pp. 23 49, 2002.
10. [10] R. Hasan, D. Mitra and K. V. Ramaswamy, "Trade reforms, labor regulations, and labor-demand elasticities: Empirical evidence from India," Rev. Econ. Statist., vol. 89, no. 3, pp. 466 481, 2007.
11. [11] P. Aghion, R. Burgess, S. J. Redding and F. Zilibotti, "The unequal effects of liberalization: Evidence from dismantling the License Raj in India," Amer. Econ. Rev., vol. 98, no. 4, pp. 1397 1412, 2008.
12. [12] K. Kochhar et al., "India's pattern of development: What happened, what follows?" J. Monetary Econ., vol. 53, no. 5, pp. 981 1019, 2006.
13. [13] N. Pavcnik, "Trade liberalization, exit, and productivity improvements: Evidence from Chilean plants," Rev. Econ. Stud., vol. 69, no. 1, pp. 245 276, 2002.
14. [14] M. J. Melitz, "The impact of trade on intra-industry reallocations and aggregate industry productivity," Econometrica, vol. 71, no. 6, pp. 1695 1725, 2003.
15. [15] A. B. Bernard, J. B. Jensen, S. J. Redding and P. K. Schott, "Firms in international trade," J. Econ. Perspectives, vol. 21, no. 3, pp. 105 130, 2007.
16. [16] D. Dollar and A. Kraay, "Trade, growth, and poverty," Econ. J., vol. 114, no. 493, pp. F22 F49, 2004.
17. [17] J. A. Frankel and D. Romer, "Does trade cause growth?" Amer. Econ. Rev., vol. 89, no. 3, pp. 379 399, 1999.
18. [18] F. Rodriguez and D. Rodrik, "Trade policy and economic growth: A skeptic's guide to the cross-national evidence," NBER Macroecon. Annu., vol. 15, pp. 261 325, 2001.
19. [19] R. Wacziarg and K. H. Welch, "Trade liberalization and growth: New evidence," World Bank Econ. Rev., vol. 22, no. 2, pp. 187 231, 2008.
20. [20] J. D. Sachs and A. Warner, "Economic reform and the process of global integration," Brookings Papers Econ. Activity, no. 1, pp. 1 118, 1995.
21. [21] S. Edwards, "Openness, trade liberalization, and growth in developing countries," J. Econ. Literature, vol. 31, no. 3, pp. 1358 1393, 1993.
22. [22] A. Harrison, "Openness and growth: A time-series, cross-country analysis for developing countries," J. Develop. Econ., vol. 48, no. 2, pp. 419 447, 1996.
23. [23] L. A. Winters, N. McCulloch and A. McKay, "Trade liberalization and poverty: The evidence so far," J. Econ. Literature, vol. 42, no. 1, pp. 72 115, 2004.
24. [24] T. D. Stanley and H. Doucouliagos, Meta-Regression Analysis in Economics and Business. London, U.K.: Routledge, 2012.
25. [25] M. Borenstein, L. V. Hedges, J. P. T. Higgins and H. R. Rothstein, Introduction to Meta-Analysis. Chichester, U.K.: Wiley, 2009.
26. [26] M. J. Page et al., "The PRISMA 2020 statement: An updated guideline for reporting systematic reviews," BMJ, vol. 372, Art. no. n71, 2021.
27. [27] J. P. T. Higgins and S. G. Thompson, "Quantifying heterogeneity in a meta-analysis," Statist. Med., vol. 21, no. 11, pp. 1539 1558, 2002.
28. [28] R. DerSimonian and N. Laird, "Meta-analysis in clinical trials," Controlled Clin. Trials, vol. 7, no. 3, pp. 177 188, 1986.
29. [29] M. Egger, G. Davey Smith, M. Schneider and C. Minder, "Bias in meta-analysis detected by a simple, graphical test," BMJ, vol. 315, no. 7109, pp. 629 634, 1997.
30. [30] L. V. Hedges and I. Olkin, Statistical Methods for Meta-Analysis. Orlando, FL, USA: Academic Press, 1985.

Related Articles