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This study provides evidence that since the late 1990s, industrialization in India has been driven by the rural organized manufacturing sector, using various indicators. The study exploresÌý the dynamics of productivity growth in rural areas usingÌý productivity decomposition methodologies. The results show that both labour and total factor productivity of the organized manufacturing sector in rural areas increased during the reference period and that the aggregate productivity growth is supported by the productivity growth of the incumbent firms (i.e. the adoption of new production technologies and organizational changes),Ìý and the entry of new firmsÌýthat areÌýmore productiveÌýthan exitingÌýfirms.Ìý

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