2. WHAT IS BREXIT ?
Brexit is an abbreviation for "British exit," which refers to the June
23, 2016, referendum whereby British citizens voted to exit the
European Union.
But decision still lies in the hand of British parliament whether to
move ahead with the Brexit or drop it.
3. WHAT IS EUROPEAN UNION ?
The EU is a unique economic and political partnership
between 28 European countries that together cover
much of the continent.
With a population of approximately 507.4 million people.
With an economy that generates a Nominal GDP of US$
18 trillion in 2014.
5. IMPACT ON BRITISH ECONOMY ?
Nobody can be sure what access Britain will have to the single market,
what its regulatory regime and migration rules will be, or how long any of
these may take to negotiate.
short-term and long term impact of Brexit is likely to be negative .
Uncertainty over future trade arrangements has already reduced confidence in
sterling and investment could well be discouraged.
The Bank of England calls Brexit the biggest risk to domestic financial stability.
That is not least because it can take many years for an economy to recover
forgone short-term output (if it does). Broadly speaking, economists find five
ways in which Brexit could affect future GDP.
Britain’s trade with the EU has been 55% greater than it would have been
without membership—and that there have been no detectable losses from trade
diverted from third countries towards the EU.
6. So WHY ARE WE WORRIED ABOUT IT?
GLOBAL IMPACT OF BREXIT ?
There will be a lot of volatility.
British-EU divorce will push capital away from the region and toward
key safe-haven markets including the U.S.
A higher U.S. dollar and Japanese yen are negative to both
economies’ export sectors.
There will be a lot of uncertainity amongst the global business
community.
The higher U.S. dollar also triggers additional pressure on China to
float the yuan lower, as it is caught in the divergence between its two
largest export markets—the EU and the U.S.
7. IMPACT ON INDIAN ECONOMY?
It could adversely impact investment & immigration of proffesionals
to U.K.
Companies in U.K needs to do serious contingency planning in case
process of exit finally begins. For eg :- An Indian company TATA
MOTORS has its largest subsidary in U.K JAGUAR and
LANDROVER , which contributes nearly 90% of operational profit
comes from sales in EUROPE.
India’s 3rd largest source of FDI Is U.K .
5 major Indian companies like TCS, Apollo tyres, Cox& Kings and
others have shown trends of dip in share prices since the discussion
of brexit began.
There are 800 Indian companies employing nearly 110000 people.
Huge impact on sentiment have been observed on Indian equity
and currency market.