Thursday, January 30, 2020

Brexit: Indian exporters cautious but hopeful ahead of Wednesday vote


India's second and third-largest markets for outbound IT services, which stood at $136 billion in 2018-19, according to Nasscom.


BS : As the European Parliament votes late on Wednesday to ratify the terms of Britain’s exit from the European Union (EU), Indian exporters are hoping to seize the gulf in trade relations that is set to emerge. “A lot will depend on the exact terms of agreement that the United Kingdom (UK) reaches with the EU.

If the UK decides to enter into a Customs union with EU, shipment flows will continue unhindered and without much change to the logistics value chain,” said Ajay Sahai, director general of the Federation of Indian Export Organisations.

A Customs union generally consists of a trade bloc composed of a free trade area and a common external tariff for products and services. This will require a new trade pact between both parties, which creates a common external trade policy. This may be similar to the current scenario where EU member states (EU) delegate authority to the European Commission to negotiate their external trade relations through the Common Commercial Policy.

But chances for this are slim, experts say. “The UK government has said it won't hand over the power to decide on foreign trade matters to Brussels (EU capital). Britain will negotiate its own trade deals with various nations after Brexit with an eye on its own interests,” a highly placed source at the British High Commission said.

It doesn’t matter what the post Brexit scenario is, since India stands a good chance to exploit the opportunity. Indian goods will compete with British goods in EU and vice versa,” Sahai said.

No comments:

Post a Comment