Page 15 - Procanvass

Business interest of Respondents

UK has always acted as a gate pass for Indian companies UK and EU, there is an increased probability that the
to access the European companies, it’s more because of companies lower their IT budgets.
the access to financial markets in London and ease of
Brexit is making it very hard for UK and other markets,
doing business with Europe, from UK. India has
UK’s credit rating has been cut, and given most buyers
positive trade surplus of $3.64 billion in terms of
bilateral trade with Britain. The total trade stood at of the bonds are from the EU there is nervousness
$14.02 billion in FY16, out of which $8.83 billion was in around these bond issuances.
exports and $5.19 was in imports. This is important for India as it would be difficult to
imagine financing India’s huge infrastructure appetite
The uncertainty following Brexit, The pound will
depreciate against most major economies. India cannot through debt finance in London as aggressively as
remain immune to this. Sensex and Nifty will tumble in currently planned.
the short-run. Finally, In the scenario that the UK does actually
negotiate an FTA without labour movement weaved in
For Investment, India is presently the second biggest
source of FDI for Great Britain. UK proved to be a as one of its essential pillars, the stocks of EU
gateway into the rest of Europe. Indian companies that immigrants in the UK or Britons in the EU are unlikely
to reduce significantly as, withdrawal from a treaty
would set up their factories in the UK could sell their
releases the parties from any future obligations to each
products to the rest of Europe under the European free
market system. One can expect Britain to try extra hard other but does not affect any rights or obligations
to woo Indian companies to invest there by providing acquired under it before withdrawal.
much bigger incentives in terms of tax breaks, lesser Rupee may depreciate because of the double effect of
regulation and other financial incentives. foreign fund outflow and dollar rise this will increase
petrol and diesel prices to an extent. The government
India businesses have presence in a wide array of
sectors in the UK which include automobiles, auto then may want to reduce additional excise duty
imposed on fuel when it was on a downward trajectory.
components, pharmaceuticals, gems and jewellery,
This will increase fiscal deficit, unless revenue increased
education and IT enabled services. Most of these sectors
will be vulnerable to changes in demand and currency Prices of gold, electronic goods, among others will
values. UK accounts for about 17% of India’s total IT increase.
Cheaper rupee will make Indian exports, including IT
exports, the risk of further moderation in growth in the
and IT enabled Services, competitive.

Trishala Zende
M.Tech. Project Management, VJTI
tsz.vjtipm2017@gmail.com

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