Abstract
This paper examines the effect of globalisation on manufacturing firm productivity in India. Globalisation improves firm productivity through export and import channels by increasing competition and adapting new technologies. Therefore, this paper focuses on firm productivity arising from firms' participation in GVC through exporting and importing in India's manufacturing sector, based on a panel of more than 13,000 firms from 1991 to 2019. We estimate GVC participation according to the Broad Economic Categories (BEC) and end-use of manufactured products. Empirical results indicate a positive and statistically significant impact of firms' GVC participation on their productivity. In addition, firms involved in forward GVCs bring more productivity gains than those engaging in backward GVCs though both participation increases productivity. Policymakers in India may reduce the tariff, quotas, and other international trade barriers to enhance the substantial impact of firms' GVC participation on productivity.