E-Paper
NRIs to gain, business to be hit
NEW DELHI: Indian immigrants may benefit and India Inc will be hurt, but the overall Anglo-Indian relationship will decline with Britain’s possible withdrawal from
NEW DELHI: Indian immigrants may benefit and India Inc will be hurt, but the overall Anglo-Indian relationship will decline with Britain’s possible withdrawal from the European Union in the June 23 referendum. It is a mixed bag for India, but likely to be a net negative.
Brexit campaigners like Nigel Farage of the UK Independence Party and former London mayor Boris Johnson have pushed for the Commonwealth to be revived as an alternative to the EU.
In theory, this could open the door to greater Indian migration to the UK, a door almost shut today in preference for EU citizens. Indians who become UK citizens is now down to a few thousand a year because of these rules. Brexit would certainly end the favouritism shown to EU citizens and Farage has said he prefers Indians to East Europeans.
India and Britain declared they were strategic partners in 2004. However, this has not disguised the fact there is little strategic substance in bilateral relations.
The UK retains a vestigial influence in smaller South Asian nations and remains the US’s main ally in Afghanistan.
But the real utility of the UK for India has been its ability to convey and even lobby for Indian concerns and interests within the EU. London’s distance from Brussels has undermined this to an extent – and led other countries like Germany and Poland to woo India.
Brexit would kill British influence on the EU altogether. What little remained of the Anglo-Indian strategic relationship would evaporate.
One immediate consequence of Brexit would be global capital market turmoil in which the rupee would fall in value and foreign capital would leave India, looking for safe havens in New York City.
The longer-term impact would be on Indian investment in the UK. India is the third largest investor in the UK. About a third of this is in the IT and telecom sector. And by far the largest chunk is different arms of the Tata group.
Many of these firms merely use London as a base with which to do work in continental Europe. These firms would migrate across the English Channel – reducing Indian FDI into the UK.
