Non Resident Indian (NRI) concerns apart, there will be ramifications for India from Brexit.

Understanding Brexit The India lens includes trade and securityImage for representation
Voices Brexit Sunday, July 31, 2016 - 09:07

Doomsday scenarios post-Brexit are no longer headlines, but the full ramifications of what this tectonic shift in global politics in general and European politics in particular are yet to unfold.

British Prime Minister Theresa May made some sharp statements this week during her visit to Eastern Europe. Speaking at press conferences, she said “British people have sent a “very clear message” on the need to reduce migration through their vote to leave the EU”, The Guardian reported. Interestingly, both the Slovakian and Polish leaders pointed out how differently the issue was viewed on the Continent, whether it is immigration control or freedom of movement – both big- ticket items at the heart of the matter.

Indians in the United Kingdom (UK) will no doubt watch keenly to see whether and how the thinly veiled racism of the Leave campaign may dissipate (and you can almost imagine their relief that they’re not the much-vilified Poles, for one).

There is, however, no question of being oblivious, when you look at the numbers — the Indian diaspora in the UK is estimated at upwards of 1.4 million (comprising 2.5 percent of the population), according to the 2011 Census, and a more recent briefing from the Migration Observatory based at the Centre on Migration, Policy and Society at Oxford University finds: “India is the most common country of birth among the foreign-born, but Poland tops list of foreign citizens in the UK”.

Non Resident Indian (NRI) concerns apart, there will be ramifications for India from Brexit. 

India’s former Ambassador to the European Union, Belgium and Luxembourg, Jaimini Bhagwati, who has also served as India’s High Commissioner to the UK told The News Minute it is clear that  “Brexit is bad for the global economy.” And that includes India.

“Europe as a whole has a certain economic path — at the margins, if Europe and the UK in particular do worse than they did together, it will have implications (for India),” he says. Any negative impact on Europe cannot be good for India.


But for public consumption, at least, the European Union (EU) position is that Brexit will not impact relations with India. The EU’s Ambassador to India, Tomasz Kozlowski says, “With regard to India, we have a strong relationship and we are committed to further deepening this partnership. As far as the EU is concerned, Brexit does not and will not change anything. As strategic partners, we have intense and regular contacts on all key matters.”

He added that the March 2016 EU-India summit saw important agreements on several fronts ranging from counter terrorism research, climate and energy, water.

“Significant cooperation initiatives are under way in these areas as well as in Information and Communication Technologies (ICT) where a joint declaration will be signed later this year. An Agenda for Action 2020 will focus cooperation in these areas over the next five years,” he added.

The UK says it is also looking at a stronger relationship with India. British High Commissioner to India Sir Dominic Asquith has said “this relation will only grow stronger (as) UK is among the largest G-20 investors in India and India is the third largest investor in UK”.

There have been at least two high-profile visits from the UK to India this month. The newly-appointed Minister for Asia and the Pacific, Alok Sharma made India his first official stop just days ago, and said not only is Britain “Open for business and thriving on the world stage" but also that the Foreign Secretary Boris Johnson would be visiting later this year. 
(Mr Sharma also made headlines for announcing that India has no real claim on the Kohinoor.)


Multilateral and bilateral trade is high on the agenda of New Delhi and the EU but the Brexit track will mean a re-aligning of work. Earlier this month, during the visit of the UK Business Secretary Sajid Javid, Commerce and Industry Minister Nirmala Sitharaman said thatinformal discussions had begun to discuss the possibility of a bilateral Free Trade Agreement (FTA) or preferential trade agreement.

She added that the Free Trade Agreement with the EU — that was already in the works — would now be re-calibrated, following Britain’s exit from the bloc. That Free Trade Agreement with the EU, incidentally, has been under negotiation since 2007, having hit several roadblocks in recent years. And yet it could well prove critically important — after all, the EU as a whole has been India’s largest trading partner. 

Ambassador Kozlowski highlights this, “Trade and investment relations remain key components of the EU-India Strategic Partnership. We are committed to the FTA which we believe to be in the mutual interest. While India is the EU's 10th largest trading partner, the EU remains India's foremost partner in terms of trade and actual investment inflows.”


•  The EU is India's largest trading partner

•  The EU accounts for 13% of India's overall trade, ahead of China (9.6%) and the United States (8.5%)

•  India is the EU's 9th largest partner

•  The value of EU exports to India amounted to €38.1 billion in 2015

•  The total value of EU-India trade stood at €77.5 billion in 2015

(Information courtesy:


•  The UK is the third largest source of foreign direct investment in India

•  India is the third largest source of FDI (in number of projects) in the UK

•  Remittances from the UK to India could be worth up to $ 3.9 billion (according to a 2013 report in the Guardian, based on World Bank data)


More info on India-UK bilateral trade data can be found here.

It’s not just trade — security can’t be discounted. 

Dr C Rajamohan told TNM that these recent developments destabilise the balance of power in favour of China. “A weaker Europe is not in our interest. It is in our interest to engage both of them (the UK and the EU) and find a way of stabilising power. There are major opportunities with both.” 

In fact, he does make a pitch for India to move quickly not just on a trade agreement, but also to consider the old Commonwealth connections — speaking of the major players there as Britain, Canada, Australia and India. Is the moment ripe for that sort of revival?

There will be much going on behind the scenes — let’s also not forget that India and the EU have had some hiccups along the way, including over the (technically bilateral) Italian marines case being used by the bloc as a multilateral issue, or pressure tactic, according to India. Though this now, experts feel, is water under the bridge, it still remains to be seen whether India will be able to make inroads with the EU, while negotiating to keep its trade interests intact, even as it hopes to capitalise on its special relationship with the UK.


Amrita Tripathi is a freelance journalist. The views expressed here are the personal opinions of the author.