There has been significant debate among economists over the impact that increases in trade liberalization may have on the growth of GDP, particularly in developing countries. There are a variety of perspectives about trade liberalization; some people believe that it would boost economic development, while others believe that it would do the reverse. Since India implemented this policy in 1991, the purpose of this study is to establish the influence that India's trade liberalization approach has had on the growth of the country's gross domestic product. In the course of the research, the Vector Error Correction Model (VECM) technique was used. All of the variables have an integrated degree of one, according to the findings of the unit root test that Johansen performed using the Augmented Dickey Fuller (ADF) method. The conclusion that the variables had a long-run relationship, also known as cointegration, was reached after the test discovered that that the variables had a single equation that cointegrated them. According to the findings of a statistical study of the long-term estimates, openness, foreign direct investment, and GDP all have a positive correlation, but the exchange rate and GDP have a negative correlation. The model adds a dummy variable in order to take into account both the impacts that occurred before and after the liberalization of trade. If the coefficient for this variable is positive, it implies that India has benefited from the liberalization of trade with other countries. When shocked by a unit standard deviation, the Impulse Response Function (IRF) reveals that both openness and foreign direct investment (FDI) had a positive effect on gross domestic product (GDP), showing that both variables had a favorable affect on GDP. On the other hand, the negative response of GDP to exchange rate shocks was consistent throughout the duration, which indicates that the exchange rate had a negative influence on GDP as a whole. The study's policy recommendations included, among other things, that the government should keep working toward free trade through trade liberalization policies, but put more energy into boosting exports by lowering export tariffs and providing incentives for export production. When implemented, this will contribute to a positive balance of payment and boost India's economy