“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.
Betting on IT:
According to a report by the British Parliament, services account for 80 per cent of the UK’s economic output and 46 per cent of exports, as of 2018-end. The UK is the world’s second-largest exporter of services by value and 41 per cent or $152 billion of its services exports flowed across the English Channel into mainland Europe. In the same year, the UK imported $116 billion worth of services from the EU.
With EU nations like Poland providing significant IT support to UK companies, Indian firms are weighing their options to push further into both markets, say sources. Interestingly, the UK and EU constitute India's second and third-largest markets for outbound IT services, which stood at $136 billion in 2018-19, according to Nasscom. “London is a major gateway for Indian IT firms entering Europe and, consequently, operational headquarters are mostly based in London," an expert said, adding that a major shakeup in existing investment and trade policy may result in Indian firms having to shift their headquarters to other nations but this will also come with significant growth opportunities.
: However, in its Strategic Review 2018-19, Nasscom had warned that a No-Deal Brexit
may pose challenges. The easy movement of skilled workers between EU and UK has been helpful, which is not expected to hold out.
Indian companies are the largest beneficiary of ICT visas issued by the UK, according to Migration Watch UK. In a 2018 report, it flagged 16 Indian IT companies for easily moving employees from abroad to Britain. For 2017, this included TCS (6,285 visas), Infosys (2,030), Wipro (1,795) and Tech Mahindra (1,020), among others. Prime among these, were the fear of a declining British Pound, which would see IT companies earning less from existing contracts and the postponement of large projects. "Our exports should be poised to take advantage of the impending gulf that will open up in trade between the UK and the EU," a senior Commerce Department official said. The official added that the Services Export Promotion Council has been asked to study the potential of exports that can be leveraged.