his working paper is the output from the first phase of a research project dedicated to how developing countries react when opening to trade and foreign direct investment on employment, income distribution, and poverty. The first phase of the research project is based on international cross-section data. It is an analysis of the Indian labour market due to economic liberalization focusing on employment, unemployment, wages, productivity, and work conditions that are related to trends in productivity. Overall, the effect of economic liberalization in India seems to have been better than in other countries.