Even as Britain’s decision to leave the European Union will require Indian companies to re-work their business strategy in the region, it will not have a major impact on them in the mid-long term time frame, according to India Inc.
“European markets is one of the key drivers for Indian companies investing in the UK…With the UK voting to leave the EU, Indian companies will re-engineer their European strategy. This should not be an issue. India will not be affected due to Brexit if we look at a mid to long term perspective,” CII president Naushad Forbes said, adding that the India-UK relationship is an important one, within or without the EU.
He, however, pointed out that many Indian companies view the UK as a gateway to Europe. According to a recent study by CII, 2015 saw investments from India rise by 65 per cent, making it the third largest source of FDI in the UK. In fact, India invests more in the UK than in the rest of Europe combined.
Further, the industry body said that the Indian growth story is domestic consumption driven and therefore, relatively insulated compared to the more externally driven emerging markets.
Industry body FICCI stressed that it is important for business to have certainty and stability, both in a political and economic context. “We expect a greater period of volatility in the days ahead while the trade and investment implications for India and the rest of the world become evident. We expect this to stabilise soon,” it said in a statement.
Further, EEPC India Chairman T. S. Bhasin said, “Though drop in Indian rupee may appear to be a good development for Indian exporters, the turmoil in the entire basket of global currencies as a result of Brexit, would bring in more currency risks and could prove disastrous for the world trade. While INR has depreciated against US dollar, it is appreciating against Pound Sterling and Euro.”
Published - June 24, 2016 04:30 pm IST
