Brexit Referendum: Impact on Indian and Global Economy

Abstract

After the subprime crisis causing jolts in the global financial markets including India in 2008, Brexit is seen as the next colossal financial affair since. Most of the EU functions as one vast economy because of Schengen, a free travel agreement among its members, enabling movement of people belonging to the EURO countries. Britain voters backed the breach by fifty-two percent to forty-two percent after a stringent campaign of roughly three months. The polling created a storm in financial markets and its aftermath can already be witnessed in currency market too. Banks and financial institutions across the world have been crushed by Brexit. Indian companies have always been a base to the U.K. to reach the European markets because of its access to London financial hub and ease of doing business with European nation because of divergent European culture and language. Apart from that India has a trade surplus of approximately four billion US dollars with Britain. Moreover, the firms which have revenue earnings from England and Eurozone are going to be the worst hit, at least for momentary. India would save a lot on its crude import bill because of the shock of the slowdown caused by Brexit referendum in several nations globally leading to the prices of major commodities plunging, specifically crude oil. Indian stock market along with the currency may face volatility in the short run in the event of Brexit, but doesn’t have much to fear.