What is Brexit? Impact globally & on India in short and long term .

1. BY: SOHIL KUMAR

2. Europe To European Union
The European Union constitutes of 28 member states with 507 million people constituting
worlds 7% population
After the end of world war 2 European union started but legally The Maastricht Treaty
was created on 7th February 1992 the European Union .
It is the world's largest economy with a nominal GDP of €18.5bn (£14.6bn, $20.2bn) for
all 28 economies combined, says the International Monetary Fund.
Citizens of countries are citizens of EUROPEAN UNION .
EURO is been used by 19 currency with the 28 this transmission accrued on January 1 st
1999 . It’s the 2nd most used
Currency in the world

3. REASONS FOR BREXIT
Prime minister David Cameron said that the eu imposes too many restristions on the british
lawmakers
Critics said that the UK will be forced to abandon the pound currency and adopt the euro
currency which has historically been weaker of two .
Average exchange rate :
1 GBP = 1.37 EUR
Adoption of euro by all EU countries by the year 2020 , but many were worrie that the
EURO is not only unstable but able to be influenced by the weaker countries like greece
UK was also concerned on the EU’s restrictions on the immigration laws . ( proposed that
people coming to UK from EU must contribute for 4 years before they qualify for the social housin

4. EU law is supranational law that is , it is not determined or confined by the
national law .
Anti – EU activist believed that EU regulations would undermine the british
interest
The immigration have doubled from 1990
It is been said every day 500 immigrant move in
to Britain .
The job market had become competitive as the
Immigrants had taken much of unemployment
It was decided in February to take the Brexit finally by the polling decision
people of bristiish , irish and commenwealth citizens and registered over 8 reciding
britain were allowed to vote .

6. The UK has held a referendum on June 23 to decide if it will stay
in or leave the European Union.
The polling decided to leave Britain from the EU giving the
Majority vote of 51%.
Prime minister David Cameron declared to steps down
from And termed the predecessor would comply in going ahead
Of the Brexit .

7. Markets Reacts
Stock market wealth vanishes away by 2.07 trillion from
across the globe .
Sterling has lost more than 10% of its value against the
dollar since Brexit. With the pound worth about $1.32, this
is down to the lowest levels since 1985.
It has also fallen in value against the euro. For much of 2015
the pound would buy you between €1.35-1.45. This year
sterling has weakened against the euro, and dropped
following the Brexit vote to about €1.20.

8. Impact on India
• UK has always acted as a gate pass for Indian companies to access the European companies,
its more because of the access to financial markets in London and ease of doing business with
Europe, from UK. Why will anyone want to set up office in Europe and learn the local language
to get access to the markets, when the same can be done sitting in London?
• India has positive trade surplus of $3.64 billion in terms of bilateral trade with Britain. The
total trade stood at $14.02 billion in FY16, out of which $8.83 billion was in exports and $5.19
was in imports.
• For the month of April 2016 the exports to Britain stood at 17.66%(USA 17.80%) of the total
exports. In terms of imports, India imports only 1.45% of its net imports from UK.
• If we look at exports from India to UK, the major exports are textiles and clothing, followed by
machinery and auto ancillaries. India’s major exports in terms of pharma are US, UK followed
by Europe.

9. • So on the event of Brexit, the pound rate might fall against the dollar and thus,
the rupee. And the companies which have income from UK and Europe are
going to be hit, at least for shorter term. Companies like Motherson Sumi which
have their 85% of income coming from Europe are keeping their fingers crossed
on the referendum.
• Indian pharma industry which has more exposure towards Europe, will also be
affected.

11. Impact of Brexit – aftermath
• Since , British economy is deeply intertwined with the European continent , its
withdrawal from EU could be a mercy , complex process and the new post
withdrawal rules might make it harder to do business between UK and the EU .
• Threatening LONDON’S status as the financial capital of the Europe .
• Shaken visa to move across Europe .
• Some people can even lose their right to live in the UK and thus be deported
back
• UK government has estimated that exit could cause the british economy to be
between 3.8-7.5% smaller by 2030 .

12. India
• UK has always acted as a gate pass for Indian companies to access the European companies,
its more because of the access to financial markets in London and ease of doing business with
Europe, from UK. Why will anyone want to set up office in Europe and learn the local language
to get access to the markets, when the same can be done sitting in London?
• India has positive trade surplus of $3.64 billion in terms of bilateral trade with Britain. The
total trade stood at $14.02 billion in FY16, out of which $8.83 billion was in exports and $5.19
was in imports.
• For the month of April 2016 the exports to Britain stood at 17.66%(USA 17.80%) of the total
exports. In terms of imports, India imports only 1.45% of its net imports from UK.
• If we look at exports from India to UK, the major exports are textiles and clothing, followed by
machinery and auto ancillaries. India’s major exports in terms of pharma are US, UK followed
by Europe.