Q-2) Since, in an interconnected world of today, each and every economic shock has ripple effect over the world, Does BREXIT too has an impact over India? Give arguments to support your answer.
Approach Answer:
Introduction: In today's interconnected economy, due to the level of globalization achieved economic decisions impact the global networks and thus sends a shockwaves around the world. It not only impacts global supply chains, but also money flows and immigration patterns. Such long lasting change has been brought by BREXIT too.
Reasons of its Impact on India:
Terms of Brexit and its economic fall back:
Immigration system: There would be a "points-based" immigration system, instead of free-flow of people. |
It would reduce access to Indians to the markets of EU. |
Tariff structure: Although most of the products would be duty free, but there would be an increased compliance burden on the traders. Traders in England, Scotland and Wales must complete more paperwork when dealing with EU countries. British firms exporting goods to the continent will have to fill out customs declarations straight away.
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Indian traders would have to find direct supply chains to EU, as Border compliance would increase. |
Northern Ireland: Unlike the rest of the UK, Northern Ireland will continue to follow many of the EU's rules, as its border with the Republic of Ireland remains all but invisible. |
It would not impact India. |
However, since the consultations and discussions were underway for a long time, businesses have got a lot of time to adjust and prepare for the new system. Thus, it is unlikely that it would come out as a shock to the global economy. Nonetheless, India must prepare for the future.
What India can do:
Conclusion: Recently Honourable Prime Minister Narendra Modi said that “India and the EU are natural partners”. It is because we have shared “universal values” of democracy, pluralism, respect for international institutions and multilateralism between India and the EU. Thus, it should not be a difficult task to forge a long lasting alliance based on such values, which should be our focus for the future.
Source: The Hindu World: Britain leaves Europe’s single market, https://www.bbc.com/news/uk-politics-55502781
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