The paper includes the most debatable issue to examine the impact of economic liberalisation on Indian capital goods sector. It deals with the effect of growth and productivity on sub-sectors of capital goods industries- electronics industries, electrical machinery industries, non-electrical machinery industries and transport equipment industries. For this purpose, ASI database has been used for period 1980-81 to 2013-14 which is further classified into pre-reform (1980-81 to 1990-912) and post-reform (1991-92 to 2013-14) period. The study yielded limited evidence of increase in productivity growth and n evidence of increase in capital productivity. The decline of growth and shares of sub-sectors also suggests that trade liberalisation cannot interpret as important factor to affect the productivity in long-run.