While apprehending about the implications of BREXIT for the World economy, Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said no significant impact of BREXIT is seen on any sector of the Indian Economy.
Though financial markets volatility cannot be ruled out, India’s economic resilience has been strengthened on account of big bang economic reforms undertaken by the Government to boost up investment sentiments in the economy. Economic reforms have increased the resilience of the Indian economy to mitigate the impact of adverse international economic developments, said Dr. Gupta.
While releasing a report on BREXIT impact on Indian economy (attached) prepared by the PHD Research Bureau, Dr. Mahesh Gupta said that though lot of diversification has taken place in India’s exports from advanced economies of Europe and America towards emerging and developing economies of Asia, Africa and Middle East, EU is still India’s significant trade partner and UK and Germany are among the top ten export destinations of India and Germany is also in India’s top ten sources of imports.
The pace of India-EU and India-UK exports and imports will continue and achieving new growth trajectories in the coming times. India-EU trade is expected to touch USD 100 billon in the next two years by 2018 of which India-UK trade would post a USD 20 billion trade trajectory, he said.
The investment inflows from EU to India will remain steady as India’s growth trajectory would remain promising in the coming times The inward FDI equity inflows from Europe are around 14.1% of India’s top ten investing countries in the year 2015-16, said Dr. Gupta.
However, the report indicates that Britain’s exit from European Union can have several economic and financial implications for the entire world economy. The BREXIT has already resulted in financial markets volatility across the world and could also spur a number of other risks through various trade, finance and confidence channels.
The weakness in European economy could also hurt world exports as weakening European currencies might put renewed downward pressure on major exporting countries.
Despite adverse international economic developments during the last many years, India is not only the fastest moving economy but its economic share in the world GDP is also increasing at a significant pace from 1.77% in 2005 to 2.86% in the year 2015, said Dr. Gupta
Notwithstanding, the slowdown in the world economy; growth in India remained robust, buoyed by strong investor sentiment and a recent fall in international commodity prices. India posted a higher growth of 7.6% in 2015-16.
We believe growth in India is expected to remain steady at 8% in 2016-17 on account of continuous pace of economic reforms and a good monsoon scenario, said Dr. Mahesh Gupta