Most Indian businesses unfazed by Brexit, see opportunities

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New Delhi, Mar 13: The majority of Indian companies view Brexit as an opportunity and greater trade, business between the two countries is already accelerating, according to business groups.
Whilst many Japanese companies such as Honda and Nissan are retreating from the UK, many Indian businesses plan to exploit the opportunities that arise from Brexit, despite no withdrawal deal having been agreed and D-Day being 16 days away.
“I’ve spoken to more than a dozen tech businesses in India in the last week looking to enter the UK. Brexit is not an important factor for them; the vibrancy of the tech sector and the market opportunities remain undimmed, for now,” said Pratik Dattani, managing director of strategy and economic consulting firm EPG, who shuttles between the UK and India. He said India Inc. was “complacent about Brexit.” Even if the British pound sinks, they will benefit, he said. “This could help mitigate some of the risks. Indian M&A has tended to increase when British assets become cheaper to buy,” he said.
Devin Narang, a scion of the Narang Family, and India head of Sindicatum’s renewable energy business, said: “I don’t think the uncertainty of Brexit bothers Indians. Brexit is a huge opportunity for Indian companies. India has a huge market and the economy is not export based it is more of a domestic market so there is an opportunity for Indian companies to start exporting. Besides Indians are used to the tariff regime and they are used to uncertainty and chaos. There could be opportunities for Indian companies in manufacturing in the UK and for cross-border M&As if similar businesses need capital.”
CEO of the UK India Business Council Richard Heald agreed “Brexit is only impacting a limited number of Indian businesses operating and investing in the UK.
“Beyond those manufacturing companies that rely on just in time supply chains and who trade between the UK and the EU, the vast majority of Indian companies located in the UK are here for UK-specific reasons. These include having a presence in and access to the fifth largest market in the world – a market where Indian companies can access the upstream strengths of the UK in engineering, electronics, and increasingly in big data, AI, and the IoT. Indeed, for these reasons, UK-India collaboration is only accelerating.”
In December 2018 the UK Department for International Trade revealed that Indian investment in the UK had skyrocketed by 321 per cent in 2017 to £8 billion compared to 2016.
“What is a priority for UK businesses is further improvements to the ease of doing business in India, especially at the state level,” Heald said.
But Indian businesses are still looking for the UK to have a clear and close relationship with the EU. “One that minimises changes to the current arrangements and implements a fair visa regime,” Heald said.
FICCI carried out a dip-stick survey of its member companies that do business in the UK – including Indian banks with EU headquarters in Britain – and found them overall “optimistic”.
“Indian businesses do not see an existential threat to them,” a FICCI spokesman said. “They want more clarity on the post-Brexit scenario which is likely to come in the days to come. The current uncertainty will slow down UK India trade and investment in the short term, but it would recover in long run”, he said. “Indian businesses are optimistic about the UK’s economic future, which is reflected in the growing investment from Indian companies in the UK, particularly in the fast-growing tech and IT services sectors,” said Jim Bligh, chair, Confederation of Indian Industry UK India Business Forum.