The Impact of Brexit on Businesses in India.
The Impact of Brexit on Businesses in India. `The world knows what this house does not want. Today, we need to send an emphatic message about what we do want` -Theresa May `The definition of insanity is doing the same thing again and again and expecting different results… Citizens` assemblies are not about replacing MPs and not about canceling or giving up on parliament. They`re about stopping the games that we have seen being played in this place – the horse-trading, the unicorn hunting, that have meant that we are in this gridlock.` -Stella Creasy. These and more are some of the quotes of some prominent world leaders on Brexit. Over time, there are indications from several corners that the two major political parties in Britain are haggling as a result of issues relating to the withdrawal of the nation from the European Union. Even if the departure of these significant players is on hold for several months, there is no doubt that a badly divided government will absolutely remain in grave crisis. This is because they haven`t been able to come to terms with the country`s most significant peacetime decisions over several decades. What is Brexit? Derived from a portmanteau of the two words `Britain` and `Exit,` Brexit is a short form of explaining the plans of Britain to split from the European Union. It critically explains the change in the relationship between Britain and the European Union in the areas of trade, migration, and security. For some time now, Great Britain has held various forms of debates and dialogues on the possible merits and demerits of Brexit from the European comity of nations since the moment that idea was broached. Why is Brexit Such a Big Deal? There is no doubt that Europe is the most important export market of Great Britain and it is the seat of the largest source of foreign investments. Apart from that, memberships in the block have assisted London in cementing its position as a global center of finance. It is considered a normal thing to announce or threaten to leave Britain by a significant business owing to Brexit. Several companies have over the years threatened to leave Great Britain, and one of them is Airbus. According to reports, this company employs workers up to 14,000 and supports over 100,000 jobs. However, the government has projected the economy of the country to be around 4%-9% in 15 years. It also foresaw that this percentage would make the economy smaller under Brexit than it would be outside the bloc and this solely depends on how and when it exit takes place. Now, let`s dive into the main topic. Should India Be Worried About the Brexit? Now, Britain has left the European Union. Thoughts keep coming from different angles. What are the possible impacts of Brexit on India? Should India be worried about Brexit? As many business leaders have warned, many have opined that Brexit will no doubt have catastrophic consequences on the British economy. India is watching the imminent aftermath of the messy divorce between the European Union and the United Kingdom closely. According to various reports, numerous Indian based companies have invested largely in Britain over the past years, and many of these business owners are worried. Many Indian firms see the United Kingdom as the major gateway that leads to the heart of the European Union. There are more than 800 Indian companies well established in the United Kingdom, and these companies employ about 110,000 workers. A significant half of the employees work in just five companies from the Tata group, which remains one of the largest foreign investors of Great Britain. There have been several indications that one of the aftermaths of Brexit is forcing thousands of workers out of jobs. Over the past few years, many companies belonging to the Indians have developed and flourished in Britain. Some of them include Aegis Outsourcing, Rolta, and so forth. These firms, according to various research studies, are operating in the United Kingdom with 13% exposure to revenues earned from the British currency. Even when you critically examine it from the European Union, you`ll discover that the percentage is up to 30. Another area where business in India has garnered a lot of exposure is the pharma sector. For them, Brexit is undeniably a bad news. It will no doubt hit their revenues as a result of the imminent weakening of the value of pound sterling. However, not all Indians are worried about Brexit. Many see Brexit as an excellent opportunity for India in different ways. India will be able to negotiate a favorable trade deal with Britain. For such an agreement, India will be given that priority by many British based politicians. Other impacts of Brexit on business between India and the United Kingdom include: India will also seize the opportunity to finalize trade deals with the European Union. The Free Trade Agreement between India and the European Union has been suspended since 2013 after the two parties have failed to reach a concrete agreement despite several years of consistent talks. Since that time, the two parties have had several discussions, but no progress was recorded. Undoubtedly, Brexit will provide India the opportunity to reopen the Free Trade Agreement Talks. Final Thought- Brexit and its impact on Business In India As Britain struggles amidst issues surrounding its future relationship with the European Union, it has similarly increased its outreach to other nations such as India in order to establish a smooth avenue for growth and development of economic relationships. Various officials of Great Britain has signaled and attested to the fact that Brexit could promote trade ties between the European Union and India. This is because the two nations will now discover an avenue to conclude on the free trade pact without involving the entire comity of nations that dominates the European Union. Certainly, the economic relationship between India and the United Kingdom still remains a robust one. While it is believed that both nations will look forward to a potential Free Trade Agreement, the negotiation could only be fruitful and bring about progress if the United Kingdom has settled the scores within its own house. India, on the other hand, will also be looking forward to concessions on Indian`s skilled labor as a tool for accessing the United Kingdom`s market. Brexit: What We Do at UKTBC At UKTBC, we strive to promote, enhance, facilitate, and support business relationships between the United Kingdom and India after Brexit. We are an independent organization free from the government of both parties. We aim to serve as the first point of contact for Indian based companies who want to partner with UK companies and vice versa. For more inquiries, you only need to navigate on our website at www.uktbc.co.uk.
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