He
said, ''As far as India is concerned, if there is an entry point for us to the
EU, that is the UK."
The entry point has now voted for Brexit.
And India will have to adjust to a changing world order.
Rolling coverage of the referendum results on Indian TV channels
were a sign of just how much interest there is in the UK here. The country's
colonial past is certainly one reason for that, and jokes about India's former
ruler made the rounds on social networking websites and messaging services.
But there is a lot more to the relationship.
Will India pull investments?
India is one of the top investors in the UK. There are about 800
Indian-owned companies in the country employing roughly 110,000 people.
Many of these firms made the investments with the wider European
market in mind.
The Tata group operates 19 separate companies in the UK,
including Jaguar Land Rover, Tetley Tea and Tata Steel UK, which it's recently
decided to sell.
About
20% of Jaguar Land Rover's sales come from Europe, a market that's become even
more important in light of the slowdown in China.
Tata reacted to the referendum result by saying that each of its
UK-based companies would review their strategies, and "access to markets
and to a skilled workforce will remain important considerations".
Several Indian IT firms too have significant interests in the
UK, in terms of both investments and exports.
India's software sector makes nearly $30bn (£22bn) each year
from Europe.
Now, industry body Nasscom has said the falling value of the
pound could render several existing contracts loss making.
But there are others who think a weakening British currency
might be good news.
'Shopping mall for India'
"With the lower pound, if there are some hi-tech assets
which can be acquired in the UK, suddenly this makes the UK a much better
shopping mall for Indian companies," says Anand Mahindra, chairman of one
of India's largest conglomerates, the Mahindra Group.
Firms here will now be looking for greater clarity from the UK
and the EU on what Brexit really means for their business.
And
so will Indian financial markets, which, like exchanges around the world, saw
volatile trading on Friday. The two major stock market indexes closed more than
2% down.
Indian Finance Minister Arun Jaitley and central bank governor
Raghuram Rajan have both assured investors that India's economic fundamentals
are strong.
In fact, Mr Jaitley went as far as to suggest that there could be
an opportunity in the turmoil. "As investors look around the world for
safe havens in these turbulent times, India stands out both in terms of
stability and of growth," he said.
Boost for trade?
Some also hope that Brexit might give a boost to trade ties
between India and the UK. Exports and imports between the two countries have
been growing, but the UK is only India's 12th largest trade partner, well
behind other European countries such as Germany and Switzerland.
India
has been holding talks on a free trade agreement with the EU, but negotiations
have stalled over several key issues.
Britain's exit from the EU has kindled hopes that it will now be
free to discuss a bilateral trade pact with India, which some industry groups
here have been demanding.
Those talks though will have to be held with the next occupant
of 10 Downing Street.
Mr Modi waited until after UK elections last year to make his
first official visit to the country. But it will soon be time to build a new
relationship with a new British prime minister.
Representative
Image
Source:
BBC
This is dummy text. It is not meant to be read. Accordingly, it is difficult to figure out when to end it. But then, this is dummy text. It is not meant to be read. Period.
ConversionConversion EmoticonEmoticon