This paper examines Transport Industry during 1994-95 to 2008-09 for indications of deindustrialization effect that is seen to be spurred by liberalization. Such evidences are found in the Compound Annual Growth Rate of principal characteristics at factory level in which ‘Number of Factories’ and ‘Total Persons Employed’ have the least growth rate. Productivity ratios are analyzed to decipher the existing trends in the Transport Industry. Causes of deindustrialization effects are explored and suggestions are put forth. Secondary data has been used in the paper sourced from the Annual Survey of Industries and website of Central Statistical Organization.