Analysis of India as an Emerging Market for Business Expansion

INTERNATIONAL BUSINESS
ACROSS BORDERS – 885735

Executive Summary
This report is aimed at performing a detailed analysis of one such emerging market that has
created attractive investment opportunities for global business organisations. The emerging
market selected for this report is India because it is one of the strongest developing country
that has been inviting a lot of business owners to invest in their country. The report provides a
general overview of India and the factors that make it one of the best suitable countries for
overseas expansion.

Table of Contents
Executive Summary............................................................................................................2
Introduction.......................................................................................................................4
General Overview..............................................................................................................4
PEST Analysis.....................................................................................................................4
Factors Promoting Business Expansion...............................................................................5
Foreign Currency and Exchange Influence..........................................................................6
India’s Trade Policies.........................................................................................................7
Existing Levels Of Foreign Direct Investment......................................................................7
Summary and Recommendations.......................................................................................8
Bibliography......................................................................................................................9

Introduction
The spread of globalisation and liberalisation has made the world of business highly complex
and competitive. The reduction in barriers to global expansion has allowed business
organisations to take their work operations overseas and achieve the benefits of operating in
multiple countries. Business organisations are trying to explore untapped markets that can
offer them a competitive edge in the industry. Most of the business organisations are eyeing
upon world’s largest developing countries, such as India, China, Russia, Thailand, Indonesia,
Turkey, Nigeria, Mexico, etc. to expand their business operations and make use of economies
of scale.
General Overview
India, also known as the Republic of India, is a part of Asia and is the seventh largest country
in the world. In terms of population, India stands as the second most populated country with
over 1.2 billion people. The country ranked sixth in terms of GDP in 2017 and was declared
to be the third largest country in terms of purchasing power parity. After the 1991 economic
reforms, India became one of the fastest growing economies in the world (BBC News, 2018).
Due to its large population, India faces a number of challenges, such as poverty, corruption,
malnutrition, lack of employment, inadequate healthcare, etc. Out of the world’s top 15
information technology outsourcing companies, seven are based in India and as a result of
this, India is considered to be the most suitable country for business expansion after the
United States (IBEF, 2018).
PEST Analysis
PESTEL analysis is a framework that allows to assess the macro environment of a country on
the basis of six different factors i.e. Political, Economic, Social and Technological. A
PESTEL analysis of India is given below:
Political Factors
India is one of the largest democracies in the world and have a stable form of government
that supports foreign direct investment. The government of the country has experienced an
improvement in its political environment post liberalisation. Post 1991, India started
abolishing the rule that required foreign industries to take licences for expansion in India