Brexit won’t hit India’s economy

While the Indian economy is unlikely to get affected by a possible exit of the UK from the European Union, experts cautioned about short-term volatility in the Indian financial markets. It could further impact Indian businesses and professionals operating in the UK. Britain will vote to decide whether to continue in the European Union or not in a referendum on June 23.

“The impact will be short-term and peripheral in nature. There will not be any direct impact on India as trade and investment relation with Brit-ain as well as EU would continue as usual. But there will be secondary impact in the form of volatility in forex rate,” said Madan Sabnavis, chief economist, CARE Ratings.

If the UK exits the EU, he said it will have an impact on their Balance of Payment. “In such a scenario, both the Euro and the Pound will see high volatility, which is likely to trigger a rally in US dollar against major currencies, including rupee.”