Young and unpredictable, emerging economies appear to have become the main drivers of global growth and sustainability in the 21st century. With 1.2 billion inhabitants and the 4th largest economy in the world, India is a major force in the global market. With a growing middle class, improved health conditions, doubled life expectancy and quadrupled literacy rate, India has seen the highest growth among the BRICs (World Bank Group).PEST analysisPolitical factorsFormer British colony , India gained independence in 1947. Often called the most popular democracy in the world, the parliamentary republic, with its strong multi-party electoral system (over 200 parties), allows neophyte parties to address a wide range of issues . Democracy still appears to need improvement in terms of consolidating government institutions, reducing repression, and reducing income inequality. Critics say corruption endangers Indian democracy, as does poverty and a weak justice system (Ghosh, Palash). Government interference is still relatively strong and contact with the government is essential for doing business in India. Since its opening to the global market and liberalization of trade in 1991, Indian labor laws have been pushed to be less restrictive towards businesses and private capitalists. The country's tariffs continue to be high with investment standards still restrictive (World Bank Group). Economic Factors With a GDP of $1.842 trillion in 2012, India is one of the fastest growing economies (World Bank Group). Another determinant of a country's level of competitiveness is its exchange rate; the Indian rupee fell to 60.92 last March, compared to 62.10 in February 2014 per dollar. The Indian rupee has averaged 32.51 since 1973, with maximum reach...... middle of paper ...... greater demand. This poses a likely threat to the Spanish textile and retail industry, and as we saw previously in the PEST analysis, innovation is the only weapon to win in the fashion industry. Substitutes: low pressureGarments have a diverse use and are generally not substitutable in the sector. short term. Rivalry: moderate pressure The Spanish textile and fashion industry enjoys a good reputation and builds customer loyalty. However, rivalry from developing countries, such as China and India, as well as other European members, notably Italy and France, pose a major threat to the industry. As we discussed in PEST analysis, innovation and creation of new ideas are the key to success and establishing a competitive advantage over competitors. Quality is a priority, but very careful measures and practices must be taken to win the battle of rivalry..