With the UK deciding to exit the European Union, concerns are being raised on the implications the country's exit, or Brexit as it came to be known as, is likely to have on the Indian economy. Here is what the country's finance minister and other leading figures have to say about the impact Brexit is likely to have on India.
"Well-prepared for any short-term volatility"
“As regards the Indian economy, we are well-prepared to deal with the short and medium term consequences of Brexit. Our macro-economic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline, and declining inflation. Our immediate and medium-term firewalls are solid, too, in the form of a healthy reserve position."
"Prepared for any eventuality"
RBI
“Indian economy has good fundamentals, low short-term external debt and sizeable foreign reserves. RBI is prepared for any eventuality...will intervene in currency markets when necessary...rupee's fall lesser than many other currencies...(The) Reserve Bank is continuously maintaining a close vigil on market developments, both domestically and internationally, and will take all necessary steps, including liquidity support, to ensure orderly conditions in financial markets.â€
"We are the most stable economy"
“India is fully prepared to deal with short and medium term impact of Brexit. Inflation decline, stable and liberal policies and fiscal discipline will protect us from any possible global economic turbulence due to Brexit. We are one of the most stable and fastest growing economies offering a lucrative investment destinationâ€.
"Strong macro parameters, our firewall"
secretary, Economic
Affairs
“India better placed to deal with post-Brexit challenges. Strong macro parameters, forex reserves, strength of real economy are our fire-walls.â€
As far as oil prices are concerned, if they decline, the Indian economy will benefit. The government will take a considered view. We are prepared to deal with all eventualities.
"Impact on trade in short term"
former secretary,
Economic Affairs
"The exit of the UK from the EU will impact the trade in the short-term but it will correct itself in a period of time. We have strong fundamentals. The macro-economy, for instance, is in good condition and policies are in the right direction...Indian investments in the UK will get impacted by currency fluctuation and the trade regime changes but things will stabilize. The volatility in the stock exchanges will not last long and the markets will soon settle down.
"Great opportunity for India to boost trade with UK"
professor, NIPFP
There is likely to be a temporary fall, both in terms of trade and financial flow. I expect normalcy to come in short period of time. The transmission channel from Europe to India will not be disturbed due to this split. It will not have a major impact on the way we do business with Britain. In the short term, it is a great opportunity for India to boost trade with the UK.
"Beneficial for India in medium term"
chief policy advisor,
Ernst and Young
In the medium term, I think this will be beneficial for India in terms of jobs and even in terms of potential diversion of UK’s investment. There will be short-term disruption in terms of exchange rate, trade and investment. This should wane away within a week to10 days. And the underlying strength of the currencies would take over again. I think that there will be a net beneficial impact as far as Indian immigration in the UK is concerned.
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