There is a rising concern in the recent times regarding the growth of Indian manufacturing sector
and the sources of productivity growth. Recent trends indicate that growth is highly import
intensive while both total and partial factor productivity growth is concentrated only in few
subsectors. Using the prowess database from 2002-2012, the paper analyses the impact of trade
and research and development on labor productivity in the Indian electronics industry. The paper
finds that trade and R&D per se do not contribute to labor productivity, however, the joint impact
of both these variables is positive and significant, suggesting strong complementarities between
internal R&D and technology transfer in the Indian electronics industry.