In this investigation, AISI 304LN austenitic stainless steel pipes having 25 mm thickness and 300 mm inner diameter with conventional and narrow groove were welded by continuous current gas metal arc welding (GMAW) and pulse current gas metal arc welding (P-GMAW) process. A gas tungsten arc welding (GTAW) process was used for the welding of the root pass. Microstructural study was carried out in fusion zone (FZ) and heat-affected zone (HAZ). A favourable microstructure characteristic was observed in the P-GMAW process. The study of transverse shrinkage and shrinkage stresses were done on the conventional groove with GMAW and P-GMAW process and narrow groove by P-GMAW process. It was found that narrow groove weld design with controlled welding parameters can reduce 45% shrinkage as compare to conventional groove, similarly 30% reduction in shrinkage stress can be achieved. The tensile properties were observed to increased, such as yield strength was improved from 260 MPa to 310 MPa and ultimate strength was improved from 510 MPa to 550 MPa in the case of narrow groove weld by the P-GMAW process.