Can mutation testing be successfully used in an industrial environment?
In general, I think it could. In practice, I haven't heard about anyone using it recently.
Also, by "industrial," do you mean any software development company, or did you have a specific type of business in mind?
Can anyone also let me know their views about whether mutation testing be successfully used to improve TDD from a defect reduction perspective or not?
Even if you're using test-driven design, you have to write the tests, then write the code, and only then can you do mutation testing... There can't be any defect reduction due to mutation testing because you've already written any (hypothetical =) defects before the testing starts; it's more about defect detection. The major advantage (IMO) is that it can help discover defects and deficiencies in your unit tests.