global perspectives(mgmt-(8110)SEC-7(SEM-2019’FALL’) ASSIGNMENT-Research Essay Research topic-EMERGING MARKET IN INDIA Thesis statement - “My research paper will focus upon different aspects of Emerging market as well as its impact on Indian economy. “As proposed in essay proposal I will first focus on the concept of Emerging markets and how they are having an impact on global businesses. · What is Emerging Market? = After a proper research I figured that emerging markets concept reside in developing countries. Wherein these emerging or underdeveloped economies are making a shift from their traditional economies which was originally residing on resource based industries like agriculture, oil or export of raw materials. These economies are growing at a very fast pace to more productive capacities where they are attracting foreign capital and are rapidly industrializing. Critically, they are moving to free/ mixed economies and are becoming more integrated with the global economy with its increase in trade volume, increase in liquidity, equity market. Not only this, they are also focusing on improved infrastructure: as at present they do not have such robust infrastructure to support fast-paced growth. Some other general indicators are high growth rate, competitiveness, high ROI with high risk rate, unified currency and stocks, low-to-middle per capita income and are some social instability. (Sraders, 2018) (Chappelow, 2019) (Amadeo, 2019) Some of the characteristics of emerging markets are given below: - 1)Low to middle average per capita Income-Emerging markets have low to middle average per capita income depicting low living standards and a lot of scope for improvement. Unemployment usually in these economies is more and more and more people are deployed on single task, thus, resulting in lower wages for the workforce. 2)High potential for growth-These economies has high potential for growth, their market requires lot of capital investment. These market owing to their scope for high growth attract more of foreign investment. These economies provide higher-than-average returns for investors. 3)High volatility- These economies are highly volatile, they are very much subjected and vulnerable to social, political and economical changes. As these economies are very much reliant on agriculture and resource based they can be severely impacted by natural disaster, external price shocks and domestic policy instability leading a groundwork for future development. 4)Currency Swings- Emerging markets face more volatile to currency swings in comparison to U.S dollar that’s because they do not have enough power to influence such movements. These fluctuations also result in commodities swing as of oil and food. 5)High growth rate associated with High risk- These economies owing to huge potential are growing fast and are rapidly industrializing resulting in higher growth rate even in comparison to some of the developed economies. For e.g.: -growth rate in ...

1. global perspectives(mgmt-(8110)SEC-7(SEM-2019’FALL’)
ASSIGNMENT-Research Essay
Research topic-EMERGING MARKET IN INDIA
Thesis statement - “My research paper will focus upon different
aspects of Emerging market as well as its impact on Indian
economy. “As proposed in essay proposal I will first focus on
the concept of Emerging markets and how they are having an
impact on global businesses.
· What is Emerging Market?
= After a proper research I figured that emerging markets
concept reside in developing countries. Wherein these emerging
or underdeveloped economies are making a shift from their
traditional economies which was originally residing on resource
based industries like agriculture, oil or export of raw materials.
These economies are growing at a very fast pace to more
productive capacities where they are attracting foreign capital
and are rapidly industrializing. Critically, they are moving to
free/ mixed economies and are becoming more integrated with
the global economy with its increase in trade volume, increase
in liquidity, equity market. Not only this, they are also focusing
on improved infrastructure: as at present they do not have such
robust infrastructure to support fast-paced growth. Some other
general indicators are high growth rate, competitiveness, high
ROI with high risk rate, unified currency and stocks, low-to-
middle per capita income and are some social instability.
(Sraders, 2018) (Chappelow, 2019) (Amadeo, 2019)
Some of the characteristics of emerging markets are given
below: -
1)Low to middle average per capita Income-Emerging markets
have low to middle average per capita income depicting low

2. living standards and a lot of scope for improvement.
Unemployment usually in these economies is more and more
and more people are deployed on single task, thus, resulting in
lower wages for the workforce.
2)High potential for growth-These economies has high potential
for growth, their market requires lot of capital investment.
These market owing to their scope for high growth attract more
of foreign investment. These economies provide higher-than-
average returns for investors.
3)High volatility- These economies are highly volatile, they are
very much subjected and vulnerable to social, political and
economical changes. As these economies are very much reliant
on agriculture and resource based they can be severely impacted
by natural disaster, external price shocks and domestic policy
instability leading a groundwork for future development.
4)Currency Swings- Emerging markets face more volatile to
currency swings in comparison to U.S dollar that’s because they
do not have enough power to influence such movements. These
fluctuations also result in commodities swing as of oil and food.
5)High growth rate associated with High risk- These economies
owing to huge potential are growing fast and are rapidly
industrializing resulting in higher growth rate even in
comparison to some of the developed economies. For e.g.: -
growth rate in 2018 for U.S, Mexico, Japan was 3% whereas in
Egypt, Bolivia and Malaysia was 4%, However, surprisingly it
growth stood 7% for China, Vietnam and India.
China and India are the one that are said to be the main
powerhouse in the emerging economies. Together they
contribute for the 40% of the world’s labor force and population
and are actively engaged in attracting foreign direct investment.
(Amadeo, 2019)
According to Morgan Stanley Capital International Emerging
Market Index there are 24 countries that can deemed as
emerging markets whereas, according to International Monetary
Fund there are around 23 countries. This difference is because
all these organizations has been taking different basis for their

3. research on emerging markets. Moreover, a country can be
upgraded from or downgraded to Frontier’s nation list {a subset
of emerging markets that are in its infant stage of economic
development}
· The term “emerging market economy” was first used in 1981
by Antoine W. Van Agtmael of the International Finance
Corporation of the World Bank. Today around 80% of world’s
economy is comprised of emerging markets that are playing a
huge role in stimulating economic growth. (Chappelow, 2019)
(https://www.focus-economics.com/blog/posts/how-will-
emerging-markets-perform-in-2016)
Some of the top emerging markets are China, India, Russia,
South Africa, Brazil, Mexico. There has been a major shift of
investment or industrialization from western countries to the
east i.e.- especially to Asia Pacific due to availability of low
waged labour and population. Nowadays, many big Trans-
national company has their manufacturing or operating units
established in these countries. These countries are making big
development in service, technological and manufacturing sector.
· When talking about INDIA as an emerging market it comprises
of all the characteristics that a prominent emerging market is
required to have. It has an average per capita income of around
$ 2,000 which comes in the range of low to middle income and
has annual growth rate of more than 4% and its share in the
global GDP accounts for 7% (India's per-capita income rises
10% to ₹10,534 a month in FY19, 2019) (Holmes, 2017)
There has been noticeable shift of Indian economy residing on
agricultural sector and now being backed up with the service
sector.
( https://www.statista.com/statistics/271329/distribution-of-
gross-domestic-product-gdp-across-economic-sectors-in-india/)
But still most of the population is engaged in agricultural
sectors which is depicted below table:-

4. (http://www.defproac.com/?p=1673)
India has one of the youngest population in the world where its
65% of the workforce is below the age of 35 which is one the
most trigging factor in its future economic development. Many
Trans national companies like- Toyota, Hyundai and Volvo has
their manufacturing unit established in India owing to low
wages and less cost of raw material as well as mouldable
policies due to less strict rules and legal structure. Companies
like ASDA, BT and Virgin media has their call centers due to
evolving IT hub in the nation. (Case study: emerging and
developing country - India, n.d.) Looking upon the figures of
trade India’s import are more than its exports and is facing a
fiscal deficit. Imports as of 2018-19 were $514 billion and
Exports were $330 billion (Rastogi, 2019)Nations exports figure
witnessed 9.06% growth and imports witnessed 10.41% growth.
Its major export destinations are ASEAN, South Asia, North
East Asia.
Some other interesting that back India as one of the promising
emerging markets are its ranks in varied areas: -Global
competitiveness -51st, Financial market sophistication-17th,
Banking sector ranked 24th in the world, Business
Sophistication-44th and in Innovation it is being ranked 39th
and 11th for it consumer market.
7 out of 15 top IT outsourcing companies are based in India.
(India, a fast-emerging economy, n.d.).
· Major sectors that has significantly helped India in becoming
a prominent economy for investment are (1) Telecommunication
Industry (2) Automotive Industry (3) Pharmaceutical and
biotechnology industry (India, a fast-emerging economy, n.d.)
Telecommunication Industry- Telecommunication Industry is
one of the strongest industry in India. Nation has 604.21 million
internet subscribers and India it is ranked as second largest
market in terms of total internet users.
There has been huge FDI investment in this sector which
totalled to US$32.83 billion till march 2019. Not only this, in
2018 it became the world’s fastest growing market for mobile

5. applications and its is estimated that its contribution to the
nations GDP is expected to rise to 8.2% in 2020. Upcoming 5g
technologies is said to contribute $2.2. trillion to the global
economy in next 15 years.
What is more that it is even employing 4 million people in this
industry with the 51.50% rate of market penetration. There has
been such a big boom in the industry over the years and it is
expected only to rise. (Telecom Industry in India, 2019)
(Growth of Telecom Industry in India - Infographic, 2019)
(Telecom industry may contribute 8.2% to GDP by 2020 by
leveraging 5G, 2019). Government has also been actively taking
the industry to forefront by coming out with new National
Telecom Policy of 2018 that is expected to attract US$100
billion investment in the sector by 2022 and it has also removed
the FDI cap from 74% to 100%. (Telecom Industry in India,
2019)
{https://www.investindia.gov.in/sector/telecom}
Automotive Industry- India being so populace holds so many
growth opportunities for any industry. Same is the scenario with
automobile industry where world’s leading manufacturers are
making a shift to Indian economy just because of lower wages,
easy accessible raw material and various government initiatives
attracting capital investment. Indian auto industry became 4th
largest in the world in year 2017 with the increment in sales by
9.5% and it also became the world 7th largest manufacture of
commercial vehicles in 2018. Projections are made that that
next decade is going to see huge growth on the baseline of
domestic manufacturing 30.92 million vehicles only in 2019.
Looking onto the export side it was also on the growth side
rising by 14.5% in FY 2019.FDI in this industry from year 2010
to 2019 accounts for $21.38 billion. As far as the government
initiatives is concerned it is planning to set up R&D centers
costing US$ 388.5 million to equip industry to be on par with
the international standards. Government of India approved the
FAME-II scheme requirement of (US$ 1.39 billion) for FY20-
22. (Automobile Industry in India, 2019) (Shivanshu Gupta,

6. 2018)
Pharmaceutical and biotechnology Industry- Indian Pharma
industry is deemed to be setting a new high of USD 38 billion
dollars by 2030. Government is fueling the industry growth by
promoting innovation by having research ecosystems with
competitive tax breaks on R&D investments and technological
transfers by simplifying regulatory framework. (Indian Pharma
industry aspiring to grow to $120-130 billion by 2030: IPA,
2019). At present this industry is valued to be $11 billion and is
expected to be even more bigger in coming years. But it is also
facing some challenges like unstable pricing and policy
environment, lack of capabilities in the innovation space as well
as external market and quality compliances by FDA. (Rees,
2019) Pharma exports as of FY2019 was US$17.15 billion. This
all due to the demand of Indian pharma for around 50% of
global vaccines, 40% of the generic demand in US & 25% of all
medicines in UK. Pharmaceutical is estimated to be the worth of
US$33 billion in 2017 and is projected to rise with the growth
rate of 22.4% from 2015-20. (Indian Pharmaceutical Industry,
2019)
· Brief introduction that Indian economy is facing in being a
Emerging Market:
1)Environmental challenges
2)Unemployment
3)National Infrastructure
4)Shifting of FDI interest
All the economies that are an emerging markets and holds the
prospects for becoming developed economy are facing these
challenges. Environmental challenges because they are mostly
reliant on use of natural resources resulting in environmental
dis-balance and making ecological crisis. As far as the
Unemployment is concerned, the unemployment rate in India is
6.8% that too because of shift from the traditional economies to
service based economies leaving the people employed in
resource based industries unemployed due to their inability to
cope up with the technological advancements. Indian economy

7. is working and still has to work on it national infrastructure like
road, buildings, internet, electricity in rural areas. Poor
regulatory framework and lack in legal policy framework has
lead to many hurdles in maintains a good reputation thus
distracting and fearing TNS companies in making investment in
the Indian economy. On an whole, it can be said in coming few
years these emerging economies can be superpower and be the
hub of initiating innovations and setup base for various million
dollar industries.
References
Amadeo, K. (2019, july 11). Emerging Market Countries and
Their Five Defining Characteristics. Retrieved from
www.thebalance.com: https://www.thebalance.com/what-are-
emerging-markets-3305927
Automobile Industry in India. (2019, september). Retrieved
from www.ibef.org: https://www.ibef.org/industry/india-
automobiles.aspx
Case study: emerging and developing country - India. (n.d.).
Retrieved from www.bbc.co.uk:
https://www.bbc.co.uk/bitesize/guides/zgwm4j6/revision/1
Chappelow, J. (2019, october 4). Emerging Market Economy.
Retrieved from www.investopedia.com:
https://www.investopedia.com/terms/e/emergingmarketeconomy
.asp
Growth of Telecom Industry in India - Infographic. (2019,
october 21). Retrieved from www.ibef.org:
https://www.ibef.org/industry/telecommunications/infographic
Holmes, F. (2017, june 15). One Easy Way To Invest In The
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https://www.forbes.com/sites/greatspeculations/2017/06/15/one-
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India, a fast-emerging economy. (n.d.). Retrieved from
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Indian Pharma industry aspiring to grow to $120-130 billion by
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8. https://economictimes.indiatimes.com/industry/healthcare/biotec
h/pharmaceuticals/indian-pharma-industry-aspiring-to-grow-to-
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from www.ibef.org:
https://www.ibef.org/industry/pharmaceutical-india.aspx
India's per-capita income rises 10% to ₹10,534 a month in
FY19. (2019, may 31). Retrieved from www.livemint.com:
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income-rises-10-to-rs-10-534-a-month-in-fy19-
1559318636062.html
Rastogi, V. (2019, july 4). India’s Export and Import Trends
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https://www.india-briefing.com/news/indias-export-import-
trends-2018-19-18958.html/
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