The Finance Ministry is closely watching the developments surrounding the referendum in Britain on the country’s continuity in the European Union and India was well prepared to handle any eventuality, a top official said early on Thursday.
“If Brexit happens, India is ready,” Economic Affairs Secretary Shaktikanta Das tweeted. “Brexit vote today. We are closely tracking developments in UK. India well prepared,” he added, referring to the crucial vote on Thursday.
Industry chambers have been asking the government to keep a contingency plan ready for Brexit.
“As a key emerging market and the one which is being preferred by the global fund managers, India could witness wild fluctuations or large outflows in sync with an overall trend,” Assocham said in a statement. “That is something to watch for.”
The Confederation of Indian Industry (CII) pointed to the fact that India invests more in the UK than in the rest of Europe combined, and has emerged as the that country’s third largest foreign direct investor.
“Access to European markets is therefore a key driver for Indian companies coming to the UK.”
Britain ranks 12th in terms of India’s bilateral trade with individual countries. It is also among just seven in 25 top countries with which India enjoys a trade surplus.
According to commerce ministry data, India’s trade with Britain was worth $14.02 billion in 2015-16, of which $8.83 billion was in exports and $5.19 was in imports. The trade balance thus was a positive $3.64 billion.
Ficci also said Britain’s exit from the European Union would create considerable uncertainty for Indian businesses engaged with the UK and would possibly have an adverse impact on investment and movement of professionals to that country.
The markets were nervous in India. Key equity indices were trading flat on Thursday after having ended lower the previous day in what was a volatile session of trading. Eighteen stocks that go into the sensitive index of the BSE were trading lower and only 12 were in the green.