Impact of Brexit on India:

Opportunities as well as challenges

Brexit will not only impact UK’s trade and investments with the EU but also its other trading
and investment partners. Indian companies, many of which have invested heavily in the UK
are likely to be quite severely impacted by Brexit. This will ostensibly shape the destiny of
Indian economy.
India considered the UK as a gateway to the European Union and Europe. Now it has to find
an alternative for securing the free access to Europe.
UK has clearly identified India as a major partner and vice versa in the post-Brexit era. The
focus on India by successive British Prime Ministers and other key ministers is a testimony to
the value attached to India as a major trading and investment partner. With the expiry of the
Bilateral Investment Treaty in March 2017 and the absence of a Free Trade Treaty, the
imperative to conclude an India-UK FTA is apparent particularly after Brexit. Both sides at
the highest political level have committed themselves to conclude an FTA as soon as
possible. However, such an FTA can only be signed after the UK leaves the EU and while
both countries have their own wish lists, the parameters of a bilateral FTA will be predicated
on the terms and conditions of the UK’s exit from the EU.
India is a major supplier of auto components to the EU region. The region accounts for about
36% of India’s total auto component exports, while the share of UK is about 5%. The UK
passenger vehicle market is highly export oriented and the segment has close linkages with
the EU automotive market. The anticipated slowdown in the UK and the EU region and
disruption in the supply chain will have a dampening effect on the sector. Also, the
depreciating Pound will impact the revenue stream of companies over the near term.
https://www.mea.gov.in/distinguished-lectures-detail.htm?847
https://blog.politics.ox.ac.uk/brexit-and-the-future-of-india-uk-ties/