DMPQ: India’s growth story has bypassed the industrial sector. what are the reasons for low performance of industrial sector in India post liberalisation.

The industrial sector has performed poorly in the reform period because of decreasing demand of industrial products due to various reasons’ such as cheaper imports, inadequate investment, infrastructure etc. India is a founder member of WTO and in facilitating globalisation of Indian Economy, India like other developing countries is compelled to open up its economy to greater flow of goods and capital from developed countries and thus the domestic industries become vulnerable to competition from imported goods. Cheaper imports have replaced the demand for domestic goods in India.

The investment made in infrastructure facilities, including power supply, has remained inadequate and hence domestic industries have not found conditions favourable to compete with foreign goods. Globalisation has led to free movement of goods and services from foreign countries and thus caused the local industries to die out and employment opportunities to fall in developing countries like India.

Moreover, India still does not have the access to developed countries’ markets because of high non-tariff barriers not only in the form of quantitative restrictions but also in the form of agricultural subsidies, sanitary and phytosanitary conditions, etc. Thus, the domestic industries were adversely affected by liberalisation.

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