India expects to reap Brexit benefits
Amidst all the handwringing over the United Kingdom’s Brexit vote, India policymakers see a silver lining.
Apparently, the Brits and Indians have similar feelings about the European Union, which has been screwing the Indian government as well.
For more than a decade India and the EU have been negotiating a trade deal without any success.
Now that Britain is becoming disentangled from the EU, Indian policymakers believe New Delhi could quickly negotiate a new trade agreement with a Britain alone, reported the Financial Times on Monday.
“The UK is going to look to build its relationships with the rest of the world, and will seek to pursue new opportunities with us,” Jayant Sinha, India’s deputy finance minister, told the Financial Times.
Swapan Dasgupta, an independent member of parliament close to the ruling Bharatiya Janata party, said concluding an India-UK trade deal would be far easier.
“If an FTA [free-trade agreement] negotiating unit is 25 constituent countries with their own pluses and minuses, you are not going to get to some sort of common ground where the losses balance the gains,” he said told the FT. “But there is a far greater chance of it with the UK. We understand each other, and there is very little clash in what we want.”
Business people expect tariffs to come down on both sides. And Indian companies may use the weak pound to acquire UK textile companies.
Of course, it’s not all rosy. Indian companies such as Tata Steel and Tata Motors — which have big manufacturing operations in the UK — will suffer from any new trade barriers between the UK and the EU.
In addition a weak pound will hurt Indian companies with significant sales to the UK.
Of course, the potential benefits of Brexit to India would not be realized immediately as the UK will be spending the near future figuring out how it actually leaves the EU.