InvestorQ : Do you believe that India could really gain from the BREXIT deal that has just been signed between the UK and EU?
vaishnavi mhatre made post

Do you believe that India could really gain from the BREXIT deal that has just been signed between the UK and EU?

vidhya Laxmi answered.
3 years ago

The big question is whether India can actually benefit from BREXIT in terms of giving a more aggressive push to its trade and commerce. Here are a few points to keep in mind.

· India could benefit substantially in terms services exports once the EU driven curbs on the free movement of professionals between the two markets are in place. India, then, has a more competitive position to assert its credentials.

· Post BREXIT, UK nationals will no longer have unrestricted freedom to work, study, start a business or live in the EU. Similarly, other residents of EU nations also would not have such unlimited access to the services in the UK. India gets an opening in EU and UK.

· Not much may change with respect to goods as the post-BREXIT deal is in place. So, the UK still gets preferential treatment in trade. However, customs clearances will still be there and the UK would seriously look at FTA with large trading partners.

· The ideal situation for India would have been BREXIT without a deal. However, that would not be practical as both the EU and the UK do not want to spoil the goodwill they have invested in each other over the last 100 years.

· Since bilateral services trade is substantial and now free movement is restricted, India can sense opportunities in areas like information technology, research & development, architecture and financial services. The list could really go on.

· Recent surveys have indicated that almost all the businessmen based out of London believe that Brexit would either cause their businesses in India to grow or have no impact. Either ways, it does give an opportunity to expand the footprint.

· Mr. Modi has used the opportunity by inviting Boris Johnson as the chief guest for the Republic Day and that could be a good start. UK may have prioritized Australia and NZ for FTAs but if India pushes the right buttons, it may not be too far behind in the race.

· Instead of putting all its bets on UK, India must also speed up with the EU. For example, Vietnam has signed the FTA with the EU and now it will have the duty advantage of just 9.6% on apparel and just about 6% in marine products. India should push that.

Finally, let us not forget that the there is the potential to design a proper FTA between the UK and India and that has the potential to expand the by 26% with the FTA in place. We must not forget that the UK is India’s 14th largest trade partner with more than $14 billion two-way trade. Above all, India has a $2 billion trade surplus with the UK, which is valuable.