Productivity Gains from Technology Imports and Spillovers in the Indian Manufacturing Sector

India is currently one of the fastest-growing emerging economies in the world, with a continued focus on maintaining its growth momentum and enhancing the productivity of its manufacturing sector. This paper aims to examine the impact of technology imports and spillovers on the productivity of the Indian manufacturing sector. Applying econometric analysis to a panel of 4,293 firms from various manufacturing subsectors for the period 2006–2019, the study assesses the productivity impact on technology-importing firms and the productivity spillover effect of imported technology on domestic firms. Results suggest that firms in India have not only benefited from imports and the usage of foreign technology, but they have also gained due to technology spillovers. Foreign direct investment has been the most important horizontal spillover channel. Large and technically efficient domestic firms have also derived productivity gains from the horizontal spillover channels of trade, technology purchases, and skill spillovers.