BREXIT: Trigger for larger things to come?
Discussion on consequential scenarios: Focus on India
June 2016 will be remembered in posterity for one of the major global event risks materializing—a British referendum to exit the European Union (EU). The true ramifications of BREXIT will take months, if not years to become apparent. While there are a number of possibilities that can play out in the coming months, it is important to take a step back and gauge the impact on the Indian economy through its linkages with UK and the broader EU economy.
At this juncture, it is almost futile to say that BREXIT implies uncertainty, but that is an aspect most economies and corporates would have to deal with. The way forward will be volatile and can possibly be subject to changing political equations in the EU and UK itself. While it will be beneficial for both the parties to resolve the situation as fast as possible, the reality may be different.
Given these circumstances, Indian companies can expect some hit to their UK businesses as overall growth in the country slows in the immediate short run. A weaker currency will also mean that any repatriation of profits from the UK region may result in losses as compared to the pre-BREXIT era. However, in the mid to long run, if the forces of globalization play themselves out well, an event such as BREXIT may turn out to be positive for India, bringing it closer both to the EU and the UK.
Take a closer look at BREXIT’s significance for India as this report explores consequential scenarios on Indian businesses and industries—such as Consumer and Industrial Products; Energy and Resources, including Oil and Gas, Power and Utilities; Financial Services, including Banking and Securities, Insurance, Investment Management, and Real Estate; Life Sciences and Health Care; and Technology, Media and Telecommunications.
The paper also discusses the formal and legal process for any country to withdraw from the EU—Article 50 of the Lisbon Treaty—and four scenarios on how the future can play out: The Norwegian model, the Swiss model, World Trade Organization (WTO), and the Canadian model for Comprehensive Economic and Trade Agreement (CETA).
Download the report to learn more.