CONTENT

Britain & European union

Brexit
Reason
Effect of Brexit on UK
Effect of Brexit on India
Summary
Conclusion

BRITAIN
Britain comprises of Four nations:England
Scotland
Wales
Northern Ireland
It is also referred as UNITED KINGDOM

EUROPEAN UNION
The European Union (EU) is a politico-econo
mic union of 28 member states that are loca
ted primarily in Europe
The EU has developed an internal single mar
ket through a standardised system of laws th
at apply in all member states.
EU policies aim to ensure the free movemen
t of people, goods, service and capital within
the internal market.

MEMBER COUNTRIES

BREXIT

First referendum took place in 1975 whether the Britain shoul

d be a part of EU or not.
67% of the voters voted in favour to be a part of EU.
because of this referendum cabinet divided into two groups
1 pro- European
2 anti- European
in 1983 opposition labour party campaigned to withdraw from
EU
in 2012 again some political parties ask for referendum whic
was rejected by PM David cameron.

In 2013 under pressure from his MPs Prime Minister David Ca

meron announced that if we win election in 2015 I will go for r
eferendum before 2017.
And his party won the election in 2015 and referendum act wa
s introduced in parliament to campaign in favour or against th
e membership in EU.
On 23 June 2016 last referendum was organised and on and th
e final result was :
Leave- 52% votes
Remain- 48% votes
And finally Britain decided to leave the EU .

REASONS
British wants reforms in European union
Link between immigration and Eu membership
The British press is far more Eurosceptic more t
han in 1975
The relative health of the UK economy

Effect of Brexit on UK

Prior to the referendum, the UK treasury estimated that being in th

e EU has a strong positive effect on trade and as a result the UK's tr
ade would be worse off if it left the EU.
The International Monetary Fund (IMF) forecasts reduced world eco
nomic growth by 0.1% following the referendum, and greater reduc
tions in UK economic growth.
On 24 June 2016, the bond and credit rating agency of Moody's, on
the basis of the result of the referendum, downgraded the UK's sta
nding as a long-term debt issuer and the countrys debt rating outlo
ok from "stable" to "negative,
On 15 July 2016, Reuters reported that the value of UK funds' assets
under management has dropped by more than $40 billion or 8.2 pe
rcent "in the three weeks since Britain's vote to leave the EU",
On 22 July 2016, a "flash" (provisional) estimate for July from the M
arkit Purchasing Managers' Index (a survey of business activity) indi
cated the worst economic performance since the recession of 2009,
with the important service sector being badly affected. The pound f
ell by one cent against the dollar on the new

Effect of Brexit on India

Rupee may depreciate because of the double effect of foreign fund

outflow and dollar rise.
This will increase petrol and diesel prices to an extent
The government then may want to reduce additional excise duty im
posed on fuel when it was on a downward
trajectory. This will increase fiscal deficit, unless revenue increased
Prices of gold, electronic goods, among others will increase
Cheaper rupee will make Indian exports, including IT and ITeS, co
mpetitive

#Trade
Overall, Brexit might not be good for India as India would lose a friend withi
n the EU and would also have to deal with a fairly insular/aggressive new le
adership in the UK. There will be confusion in some of the pending trade d
eals: India awaits EU stance on FTA. The falling pound will also make it har
der for Indian exporters whose profit margins & competitiveness will erode.

#Currency
The Indian rupee, according to Indranil Sen Gupta of BofA Merrill L
ynch, could depreciate if the UK leaves. The rupee could fall to the
Rs68 per US dollar level, in case of Brexit, the economist said in a
note on June 20.

#Immigration
Work-related visa restrictions have already resulted in a fall in the n
umber of Indian students in the UK. Following Brexit, the number of
Indian students applying to UK universities and colleges might redu
ce further. Sceptics also fear that visitation rights of relatives who h
ave families in UK might also be affected. Also, those applying for v
isas in Britain may face a hard time. With Brexit, the governments
stance on immigration will likely curb overall immigration into the co
untry.

SUMMARY
The overall impact of Brexit would be, Global Financial houses wou
ld get disrupted and would impact FDI in India
If Brexit has a significant on EU economies the impact on Indias c
ould be around 3 times larger than that from an isolated UK

THANK YOU