The long-awaited BREXIT deal has finally been sealed but it is too early to draw inferences on its implications on India as the minutes of the deal have not yet been disclosed. “We’ve got a great new deal that takes back control,” Boris Johnson said on Twitter. He added that this deal will allow Britain to leave the EU in two weeks’ time. Britain is likely to leave the European Union by October 31. While the exit of Britain from the European Union may bring marginal benefits for India, the Indian companies based in the UK may face some problems due to new tariffs and complexities.
India could see BREXIT as an opportunity to reset the legal terms of its trade with the UK and EU, through free trade agreements. “Now, at least there is clarity for manufacturing and trade, which will benefit India to prepare its further line of action. There will be little advantage for India, however, the complexities in the businesses will increase due to new rules,” Sameer Narang, Chief Economist, Bank of Baroda, told Financial Express Online.
This new deal ensures that we #TakeBackControl of our laws, borders, money and trade without disruption & establishes a new relationship with the EU based on free trade and friendly cooperation. #GetBrexitDone #TakeBackControl
— Boris Johnson (@BorisJohnson) October 17, 2019
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Implications on India will also be much clearer after it is revealed if the Free Trade Agreement continues as India will have to adjust to the change. “The effect of the BREXIT deal is very much limited and will be based on the trade agreements in the new deal. However, Indian companies operating in the UK may have to face some glitches. As far as migration in the UK is concerned, India will have a slight advantage,” Madan Sabnavis, Chief Economist, Care Ratings, told Financial Express Online.
Meanwhile, the opposition party of the UK has expressed disappointment over the current BREXIT deal. Leader of the Labour Party, Jeremy Corbyn said that Boris Johnson has negotiated a worse deal than Theresa May, which risks their rights and protections. He also urged to reject this deal as it won’t bring the country together.
From what we know, Johnson’s negotiated a worse deal than Theresa May. This sell-out deal risks our rights, protections and NHS. It won’t bring the country together and should be rejected. pic.twitter.com/ZMKSNt2Nc9
— Jeremy Corbyn (@jeremycorbyn) October 17, 2019
However, the Indian stock market reacted positively in response to the BREXIT deal and surged following the global tunes. All the sectoral indices, barring IT, ended in green and the broader indices too posted decent gains. “Markets continued their positive bias for yet another session and gained nearly a percent. The first half was dull but a sharp surge in the banking index in the latter half pushed the benchmark higher. Besides, the news of Brexit deal between the UK and European Union further boosted the sentiment,” said Ajit Mishra, Vice President, Research, Religare Broking Ltd.