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Day 49 – Q 3.Has Brexit affected India in any away? Analyse.

3. Has Brexit affected India in any away? Analyse. 

क्या ब्रेक्सिट ने भारत को किसी भी तरह से प्रभावित किया है? विश्लेषण करें।


Brexit is an abbreviation for “British exit,” referring to the U.K.’s decision in a June 23, 2016 referendum to leave the European Union (EU). The vote’s result defied expectations and roiled global markets, causing the British pound to fall to its lowest level against the dollar in 30 years.



  • EU and India would emerge as strong trade partners through enforcement of BTIA. 
  • EU is India’s largest trading partner accounting for approximately 13% of its total world trade, while India is EU’s 10th largest trading partner. India is reliant on EU for machinery, nuclear reactors, optical and photo equipment, aircraft, etc.
  • EU’s top imports from India include mineral fuels, oil, distillation products, organic chemicals, textiles, etc. The key sectors of trade in services between the two are sea and air transport, computer and information, financial and banking services.

Positive effects of Brexit in India:

  • To reset legal terms: Brexit is an opportunity for India to reset the legal terms of its trade with the UK and EU, at the multilateral level, and through free trade agreements. 
  • Students friendly: Before Brexit, British universities were forced to offer scholarships and subsidies to the citizens of the UK and EU. Brexit frees up funds for the other students and more Indian students might be able to get scholarships.
  • Increases tourism: Reduction in pound value will reduce travelling cost to the UK and will make it a good travel destination.
  • Huge investment: Brexit will help strengthen our ties with Britain because India’s focus on innovation and entrepreneurship still makes it an attractive destination for outsourcing and investment.
  • Goods and services: According to the UK’s Department for International Trade (DIT) figures, total trade in goods and services between the UK and India was 18 billion pounds in 2017, a 15 per cent increase from 2016.
  • Current account deficit: Lower commodity prices, crude oil prices may help narrowing current account deficit (CAD)
  • Trading partners: The UK and the EU are losing trading partners in the process. So they will both be looking for replacements. Here, India can play a crucial role. We may see enhanced cooperation in segments like technology, cyber security, defence production and finance. 

Negative effects of Brexit in India:

  • Short term effects: Automobile, Pharmacy and IT might be the most affected. NASSCOM has predicted that the effect of Brexit will be felt on the $108 Billion Indian IT sector in the short term.
  • Automobile industry: In the automobile industry, Brexit may lead to reduction in sales and companies that derive good revenues of profits from Britain could get hurt majorly.
  • Disruptions: Indian companies would need to recalibrate European operations, like setting up an additional operating company within European Union. This means short term disruptions will have a financial impact, as also take up management time.
  • Immigration: Because of the large number of immigrants from EU, UK has restricted immigrants from other parts of the world, which had an impact on Indians.
  • Restrictions: Post Brexit, immigration into UK of Indians may not become easier as the UK wants to place quantitative restrictions on total number of immigrants, and only a few Indians with special skills may find it easier to work in the UK.


India should re-negotiate with the UK and EU the World Trade Organization Schedules of Concessions, for both goods and services, should resume its FTA discussions with the EU, and should prepare to launch FTA talks with the UK.

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