Long Term Effects of Britain's Exit From European Union

As expected news of BREXIT (or unexpected, doesn’t matter) came, along came the definitive volatility of markets globally. This has created major uncertainty about future of Britain’s bilateral trading arrangements, with important markets like the USA, Canada, China and mainly European Union. Also, speculations on changes in European Union's policies after this exit have became the most highly anticipated target by traders, investors, organisations, banks and even governments world over.

Also, European Central Bank and Bank of England are on alert for a funding crisis in the banking sector and may in turn could took into consideration of cutting interest rates if the situation calls. This uncertainty following the referendum up to parliament’s decision will keep markets highly volatile.

Also, new policies by both entities would be to stabilise economy and bring back the country to growth path.

One of the impact of decision by Parliament of Great Britain will be to look forward if other member countries will egress, by taking similar referendum to their respective constituencies.

Impact of BREXIT on Indian Markets

Its’ very important day for all the market’s, and we are here to discuss about the Indian Market. Is really BREXIT impacts on the Indian market?

June 24, 2016 decide whether it should “remain” in the EU or “leave”.

In Indian Market, impact of Brexit will effect or not. May by market goes down may be market goes up. Time will decide what will happen.

Impact on Currency and Markets

If really Brexit leave from the market so it will hit the Indian market as well as other market also. We are here to discuss about the Indian market. It really will hit the Indian market.

Stocks of UK and US will fall in between 15% to 20% event of Brexit. For Indian Market, it will give more affects. Indian markets endure changeable over the UK’s referendum.

For being time, the central bank and capital market regulators in India are on an alert condition to shun volatility in the markets.

The RBI is continuing a close watch on developments, and will take all important moves, including liquidity prop, to make sure orderly conditions in financial markets, the RBI said in an announcement on June 22.

Impact on Trade

In financial year 2016, India-UK bilateral trade was worth nearby$14 billion. India exported goods and services worth nearby$8.8 billion while imports from the UK were at nearby $5 billion. In the last five years, the trade has been more or less shed.

After Brexit- UK, the bilateral trade agreements between both the countries will be discuss on new terms. And hence will further impact the trade policies, import exports norms and currency pegging.

Since the currency Euro was a free float one, impact on exiting of British pound had a negative impact on the performance of Euro, as it was one of the strongest contributing currency.

Impact on Companies

India companies overseas (approx 800) operating in European region will definitely be impacted due to this decision of Britain exiting, as Britain serving as a main point of entry in European markets.

Indian companies will have to revise their existing strategies as UK domestic market is greatly dependent upon Europe for its imports and exports.

If Brexit happens, Indian interfaces like the Tata Group, have big operations in the UK. Jaguar Land Rover, Britain’s biggest car maker is kept by the Tata Group could be hit by losses. And the annual profit of these companies will drop in upcoming years.

Brexit also will have major impact on the automotive industry. That’s a big worry for the automotive industry.

In Summary: 

Rupee may decline due to the double fallout of foreign fund lose and dollar increase. This will raise the petrol and diesel prices to duration. Also effect on prices of electronic goods, gold, among others will increase. Also impact on IT services.