Why do experts say India is an emerging market?<br />
EMERGING MARKETS<br />The term “Emerging Markets" was coined by World Bank Economist Antoine van Agtmaeland dates back to 1981. <br />According to Chuan Li of University of Iowa's Center for International Finance and Development, "Emerging Markets are countries that are restructuring their economies along market-oriented lines and offer a wealth of opportunities in trade, technology transfers, and foreign direct investment.<br />Political scientist Ian Bremmerdefines emerging market as "a country where politics matters at least as much as economics to the markets".<br />In recent years, new terms have emerged to describe the largest developing countries such as BRIC that stands for Brazil, Russia, India, and China.<br />By 2050, the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world.<br />These countries encompass over 25% of the world's land coverage, 40% of the world's population and hold a combined GDP of 15.435 trillion dollars. <br />These 4 countries are among the biggest and fastest growing Emerging Markets. <br />Source : The Economist<br />
CHARACTERISTICS OF EMERGING MARKETS<br />Firstly<br />They are regional economic powerhouses with large populations, large resource bases, and large markets. <br />Their economic success will spur development in the countries around them; but if they experience an economic crisis, they can bring their neighbours down with them.<br />Secondly<br />They are transitional societies that are undertaking domestic economic and political reforms. <br />Thirdly<br />They are the world's fastest growing economies, contributing to a great deal of the world's explosive growth of trade. <br />By 2020, the five biggest emerging markets' share of world output will double to 16.1 % from 7.8 % in 1992. <br />They will also become more significant buyers of goods and services than industrialized countries.<br />Fourth<br />They are critical participants in the world's major political, economic, and social affairs. They are seeking a larger voice in international politics and a bigger slice of the global economic pie.<br />Source : Portfolio Management 2008 - presentation<br />
INDIA – BASIC FACTS<br /><ul><li>5,000 year old ancient civilization
3rd largest standing army force, over 1.5Million strong.
2nd largest pool of scientists and engineers in the World.
Before 1991: Semi- socialist approach - strict government control over private sector participation, foreign trade and foreign direct investment.
Since 1991: India has gradually opened up its markets through economic reforms and reduced government controls on foreign trade and investment.
Privatization of publicly owned companies and the opening of certain sectors to private and foreign participation has continued amid political debate.
Average GDP growth rate of 5.7% for the past two decades.</li></li></ul><li>WHY INDIA IS AN EMERGING MARKET<br />
INDIAN AUTOMOBILE SECTOR<br />10thlargest sector in the world with an annual production of approximately 2 million units.<br />A number of domestic companies produce automobiles in India and the growing presence of multinational investment, too, has led to an increase in overall growth.<br />A US$34-billion industry, exports constitute 5% of revenues.<br />Industry has a mix of large domestic private players (Tata Motors, Mahindra & Mahindra, Ashok Leyland, Bajaj Auto, Hero and major international players including Suzuki, GM, Ford, Daimler, Toyota, Honda, Hyundai, Renault, VW and Volvo)<br />All major international players have set up manufacturing capacities in India due to<br /><ul><li>Low-cost, high-skill manpower with an abundance of engineering talent – the second largest in the world.
Established automobile testing and R&D centers.
Among the lowest-cost producers of steel in the world.
The Indian auto component industry expects to grow by over four-fold to $140 billion by 2020.</li></ul>Source : The Economic Times<br />
INDIAN INFORMATION TECHNOLOGY SECTOR<br />India is the leading destination for providing IT and IT-Enabled Services (ITES), with revenues of about US$40 billion.<br />Exports constituted 79% of the total IT and ITES revenues.<br />Indian IT and ITES companies ranging from large companies (Tata Consultancy Services, Infosys, Wipro, HCL) to small niche companies.<br />Global IT companies such as IBM, Dell, Microsoft, HP, Accenture, etc. - all of whom have set up development centers in India.<br />Captive back office operations of large global corporations like JP Morgan, American Express, GE, HSBC, British Airways, etc. <br />Comparative advantage:<br /><ul><li>Availability of technically skilled and English-speaking labor force at a fraction of the costs in USA and Europe.
Quality orientation, project and process management expertise.
Annual revenue amounted to US$50 billion in 2009 and this is expected to increase to US$225 billion by 2020. </li></ul>Source : ^ "Top 50 Emerging Global Outsourcing Cities". www.itida.gov.eg. Retrieved 2010-07-22<br />
INDIAN PHARMACEUTICAL SECTOR<br />The Indian Pharmaceutical industry is about US$25 billion.<br />India occupies a significant position in the world pharmacy market <br />8% by volume (fourth largest in the world) and 1% by value.<br />The pharmacy industry exports over US$6 billion. <br />It ranks 17th in terms of export value.<br />India accounts for 22% of the global generics market.<br />India is an attractive global sourcing destination for pharmaceuticals:<br />Availability of low-cost, high-quality production and regulatory compliance.<br />Low cost of research and world-class testing facilities.<br />Cost of a research scientist in India is only about 1/6th to 1/4th of that in USA.<br />Many international biotech companies like Chiron Corp, GSK and Sigma Aldrich Corp have expressed interest, especially in Bio-manufacturing.<br />The Indian Pharmaceutical industry is expected to increase to US$225 billion by 2020.<br />Source :http://www.bestphpframeworks.com/indian-pharma-industry-riding-the-barometer-of-success.html<br />