In the present paper an attempt has been made to study the impact of globalization on Indian small scale industrial sector during the period 1980-81 to 2013-14 which has further been divided into two sub-periods namely, pre reform period (1980-81 to 1990-91) and post reform period (1991-92 to 2013-14). For the purpose of the study the data has been culled from various Annual Reports of MSME, Government of India and Reserve Bank of India Bulletins, World development Indicators and World Global Competitive Report.In the view of above, paper aims to examine the challenges and opportunities for the Indian small scale industrial sector to grow in the liberalised regime. For this purpose the paper has been divided into four sections. Section-I concentrates on the various issues of liberalisation, globalisation and privatisation in the WTO regime and Section II examine the relationship of Indian small scale industrial sector with the globalisation and liberalisation. Section-III highlights the challenges and opportunities faced by the Indian small scale industrial sector in the era of globalisation. The last section concludes the discussion along with the policy implications. It is therefore suggested that infrastructure development is also important for SSIs and the government should perform necessary steps to improve the same. The small scale industries should be empowered with the various marketing strategies which will aid small scale owners towards familiarizing their products.