Investors will look at stable emerging markets, including India

Rejecting the notion that emerging markets like India were falling due to weakness in their economies, Dr Rajan said, "I think it is markets' problem and the market problem can hit the real economy too."

"My sense is that after the initial volatility, things will stabilize, people will try and look for the good, stable emerging markets, and India is one of them. Our growth is pretty good, all the other indicators seem to be going well," Rajan said.

Emerging Markets are undergoing colossal changes

Rajan said that while there has been a huge influx in emerging markets, one should also be aware that emerging markets are going through wholesale changes.

"For example, in India a trending massive online market allows people in rural towns and villages to purchase things online. Real estate growth has been huge. A trader from Kashmir can now sell his carpets to customers around the world," he said.

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