With Britons polling on whether or not they exit from the European Union even while you read this, market watchers within India Inc. are keenly and steadily looking at the goings on in the UK from the corner of the eye. If the UK does pull out of the EU, we of course can expect a slight shake up given the fact that the EU is India’s largest single export market and the European economy is equivalent to one-fourth of the global GDP. Any shake up in Europe will send ripples in Asia too, India not to be exempted. Companies from the Software / IT, Steel, Manufacturing segments that have major investments and businesses in the UK could experience a negative Impact. In the event of Brexit, they could be forced to set up additional offices in other EU countries. The Rupee could stumble as the US Dollar strengthens due to a weakening Pound Sterling, causing a temporary upheaval. All of this could shake the job market in India temporarily, maybe for a quarter or so, however, Indian jobs are bound to remain insulated from any impact caused, if Brexit does becomes a reality. Here is why:
Autonomous India Country Heads of European Businesses
Decision makers of European businesses catering to the huge India market opportunity generally have a free hand in managing their India strategy and related decisions. It will therefore be expected that these India Managers do their best to ensure that the downside caused by the shaking of other markets is balanced out by focusing on the comparatively stable Indian market, with its huge opportunity of over 200 million middle class people. Therefore, it will be unlikely that the job market in India will see a down side, at least in the long term.
A Freehand to the UK
The EU currently ties down the UK to give priority to trade with other EU nations, not allowing it a free hand to trade with India due to the EU Competence. A Brexit is most likely to give the UK a free hand in setting up bilateral trade deals with India. This will see a huge upside for the Indian market in the long run, with jobs being created as India sees more investment by UK businesses.
The India Story – More Lucrative to the Global Investor
Seen as the worlds fastest growing economy as per the IMF report and the most favored FDI destination in 2015 by the NY Times, India and the India Story is bound to look more lucrative for global investors. With over 160 million mobile users and 277 million internet users, and technology trends spiraling across India’s market in the past couple of years, the India story becomes hard to ignore. Besides, India’s huge SME market is just an add-on to this. If this story gets betted upon, the job market in India is only bound to grow significantly.
India Inc. I believe is geared up, and Brexit could actually prove to be a blessing in disguise, with India, the India Story and India’s job market gaining strong ground on the world stage.