Trade liberalization in developing countries, like India, can lead to productivity gains by reallocating resources among firms. Import-competing sectors benefit more, but scale efficiency may decrease. Competition increases, but there are no significant learning or spillover effects. However, foreign direct investment can have positive impacts, such as skill upgrading. While trade exposure doesn't necessarily create more jobs, it can increase wage volatility. Overall, trade liberalization can have mixed effects on firm performance and labor market outcomes in the developing world.