Brexit and eu

European Union, Britain Exit, Brexit,

1. Professor & Lawyer   Puttu Guru Prasad B.Com., M.Com., M.Phil., M.B.A., PGDFTM., AP.SET., M.Phil., DRMS., L.L.B., ICFAI TMF., DIRM., L.L.M., Pre PhD (PhD)from JNTUK.,  “Diploma in Psychology from YALE University” MHRDI’s IIC Ambassador NSS Certified Program Officer, (A.U) Senior Faculty for Business Studies, Economics, Accounts Head, Board of Administration & Management Science, Bhagavad Gita & CLAT Program Coordinator,  Commerce Department, VIVA-VVIT, Nambur,  My Blog:  puttuguru.blogspot.in   My Web Site:  https://gurublogs.wixsite.com/guru 93 94 96 98 98 ,  9885 96 36 36, 807 444 9539,

2. What Is the European Union (EU)? The European Union (EU) is a group of 27 countries that operates as a cohesive economic and political block. Nineteen of the countries use the euro as their official currency. The EU grew out of a desire to form a single European political entity to end the centuries of warfare among European countries that culminated with World War II and decimated much of the continent. The European Single Market was established by 12 countries in 1993 to ensure the so-called four freedoms: the movement of goods, services, people, and money. 

3. To compete with USA, in Trade, in Technology, in War Fare, and once again to dominate the world

4. In Population and in GDP the Combined European Union is more than USA, but in Land area and per capita income USA is more than European Union. Main reason why these small European Countries come together means, to dominate USA in all aspects.

5. Why Brexit? People of Britain has been given power of decision making of their country Britain trade rules are bounded by European Law After Brexit Britain can negotiate the terms and condition of the trade with different countries

6. Britain Trade Britain imports more than it exports Britain is a big economy and has low resources, hence it is depended on Europe, China and India for its imports Europe has been providing free trade area to Britain until now

7. What is Brexit? ▶ Brexit is the prospective withdrawal of the United Kingdom from the European Union. ▶ A referendum was held on Thursday 23 June, to decide whether the UK should leave or remain in the European Union. Leave vote: 52% The referendum turnout was 71.8%, with more than 30 million people voting. It was the highest turnout in a UK-wide vote since the 1992 general election.

8. Major Aspects of BREXIT ▶ High level of intra EU trade dominated by Germany France, Poland and other countries ▶ Extent of UK dependency on EU investments & jobs ▶ Intra-EU Labor Migration from Greece and low income counties of Europe to England. ▶ EU rules & regulations of EU Parliament controlling the British Parliament. ▶ Environmental policies including carbon trading is burdensome to British economy. ▶ Real wages/Living standards inside and out of the EU are below the standards of England.

9. REASONS FOR BRITAIN’S EXIT FROM EU: Immigration : The main reason for Britain’s exit form EU is the problem of immigration. Any EU citizen can work in any member nation of EU. Approximately, 1 million people migrated to Britain in large number. Loss of Employment And Employment Opportunities: As due to immigration of low skilled people who will work for less salary, Britain’s citizens lost their employment and also resulted in reduction of salaries for British people. Sovereignty: Britain ruled many countries overall the Globe by making those countries as British colonies in 19 & 20 centuries. Even though there are no colonies and colonialism of Britain at present it thought that the prestige of being sovereign power will be lost if it is under the leadership of all EU member nations.

10. Syria and Iran Economic Crisis: One of the reasons for BREXIT is that the Britain does not handle well the economic crisis of Syria and Iran. The migrants from these countries are creating lot of havoc. Increased Terrorism and Low Economic Growth : Increase of terrorist activities and attacks over all the EU member nations has resulted in slowdown of industrial growth. Being a member nation in EU, Britain cannot take its own decisions regarding any important problems; it cannot change some laws etc. without the majority in EU Parliament. So this limited its scope of functioning towards what is needed in Britain, by the British Parliament. It resulted in a slowdown in Britain’s economy.

11. IMPACT OF BREXIT ON INDIA

12. Brexit impact on startups in India Funding to head into a downturn after Brexit Rate of success that startups get after getting into European market through Britain will be slowed down Britain exit can have negative impact on Indian market

13. Impact of Brexit on India UK always has been access point for business for Indian companies, being able to do business in UK also provide access to the European companies. After Brexit this window will get close India exports to Britain at 17.66% of the total exports, which includes textiles, clothing , machinery, Jewellery etc, this export rate might decrease after Brexit

14. Impact on India of Brexit Indian companies that have exposure to UK may get temporary hit because of Brexit Government of India(BJP) has allowed 100% FDI in India, this step can help India to become major global finance market Indian markets delivered consistent returns over the years

15. Indian Companies with UK Holdings: BREXIT will have a significant impact on UK holdings. The European operations of the non- EU companies after BREXIT will depend upon the outcome of UK-EU negotiations. Before BREXIT, TATA group has offered its assets for sale in Britain and also the share value of TATA group reduced. There are over 800 Indian companies in EU & 1,10,000 people were employing in EU. The talk of the referendum has already created a fair amount of uncertainty amongst the business community. BREXIT not only created uncertainty but it could also adversely impact investments & immigration .

16. For example , TATA motors have its largest subsidiary in UK i.e., JAGUAR and LANDROVER. JLR contributes to 90% of TATA motors operating profit. As for JLR more than 1/4th of its sales come from Europe. Thus because of BREXIT it has to redefine its strategy, they might consider relocating to other EU countries to keep enjoying tariff benefits because their profits were hugely impacted due to BREXIT. It is not only the case of TATA motors but also of many such other companies, because India is the third largest source of FDI. Companies like TATA Steel (52%), COX & KINGS (47.3%), MARKSANS PHARMA (41.7%), BHARAT FORGE (41%), earn nearly 50% of revenue from EUROPE & companies like WOCKHARDT (30.4%), APOLLO TYRES (28.5%), TCS (28%), HCL TECH (27.4%), TATA MOTORS (25.4%) & MINDTREE (25.2%) has Europe’s contribution from 20%- 30%.

17. As said by Prime Minister Modi , “ W e have always seen Britain as the gateway to Europe” . Thus there will be an impact on MNCs and also on Indian companies

18. Impact on Indian GDP BREXIT has an impact on India's GDP growth to a little extent. The decision has lowered aggregate 2016 GDP for Asian countries ,including Japan from 5.9% to 5.6% and India's 2016 GDP growth forecast to 7.3% from 7.6%. But this impact is very limited and not influenced the Indian investor’s with reference to their investment, because India is being the fastest growing major economy of the world. The impact on the GDP can be further predicted to be positive one, as the slowdown that BREXIT will trigger in several economies globally will lead to a fall in the prices of commodities like crude. This will help India save a lot on its import bill (every $1 drop in crude prices leads to roughly $1billion savings in India’s oil import bill). This will help reducing its trade and current account deficits .

19. BREXIT’S IMPACT ON INDIAN ECONOMY Month Indian Rupee Per One British Pound January 96.937635 February 97.666940 March 95.360204 April 95.089074 May 88.244526 June 95.089074 July 88.244526 August 87.562359 (up to 28th August) Indian rupee become weaker: The rupee become 50 paisa weaker at 66.60 per dollar by the end of the fiscal year. The monthly average of Indian rupee per one British Pound is as follows in the year 2016 .

20. INDIAN STUDENTS EDUCATION AND EMPLOYMENT GENERATION After BREXIT there will be reduction in migrations. Thus students from India who migrate to UK for studies will be lowered. It will be also assessed that there will be long run impact on employment generation

21. Gold price increases 3%, will continue to rise The price of the precious metal increased 3% overnight in the local market, as Britain decided to leave the European Union. With the sterling undergoing the biggest one-day drop of over 10% against the dollar, international investors turned to safe-haven assets, thus increasing the gold price 5.3% to over $1,326 per ounce in one day. As a result, the local price of gold surged Rs1,500 to Rs50,200 per tola (11.6 grams) in just 24 hours, according to All Sindh Saraf and Jewelers Association (ASSJA). ASSJA President Haroon Rashid Chand said gold prices are expected to keep rising in the next few weeks. “ The sterling is losing value … people want to avoid volatility in the currency market. Gold prices will gain strength in the near future,” .

22. Indian FDI: India is the third biggest source of Foreign Direct Investments for Great Britain. But after Brexit, UK will not be a attractive destination for Indian FDI as before. IT Sector: The IT sector will face a double fall in discretionary spending & a rise in administrative costs.

23. Conclusion Ind i a has l o s t it s gateway to Eur o pean un i o n w i th the Br i ta i n exiti n g the EU. I ndia is now forced to go into alliances with other countries of the EU. This could be good for India in the long run. It is understood that India is already trying to build trade negotiations with Netherlands, France, Germany , and others, though in a small way. Netherlands is India’s top FDI destination as of now. As far as trade relations are concerned BREXIT could force India to build trading partnership with other EU nations in order to access the rest of EU market.

24. Thank You