Brexit: Opportunities and challenges

The year 2016 will undoubtedly go down in history as having changed the political landscape of the world, not least as a result of Britain's vote in June's referendum to leave the European Union (EU). As the immediate aftermath of the seismic shockwaves on the financial markets subside, we look back at what made Brexit the most-used word of the year.In this globalised and deeply inter-connected world, India cannot be immune to any tectonic shifts in world politics. However, as many of the country's leaders were quick to point out, the Indian economy's fundamentals were strong enough to weather the Brexit storm.Could India and the UK finally take that much-talked-about special relationship to the next level Could the India-EU FTA receive an added fillip Is India ready to take its rightful place to attract some of the business that will inevitably be directed towards the Commonwealth These were just some of the many questions that were thrown up with the referendum results in Britain on June 24th and India Inc. was hot on the heels of each.Official UK government figures released in the aftermath of Brexit by the Department of International Trade, rebranded from the erstwhile UK Trade and Investment (UKTI) and headed by new minister Liam Fox, brought some cheer as they revealed that India had held on to its firm grip as the third-largest investor into the UK and the second-largest job creator.Indian companies created 7,105 jobs last year, through 140 projects. It is second only to the United States of America, which created 25,694 jobs, and ahead of Germany, which is third with 5,291 jobs from 99 projects.Fox said: “These impressive results show the UK continues to be the place to do business. We've broadened our reach with emerging markets across the world to cement our position as the number one destination in Europe for investment.“The UK-India partnership lies at the very heart of the strategic relationship between our two nations, a relationship that has never been more important than it is today.”The figures explain Theresa May's decision to choose India as her first choice of destination for a business delegation outside Europe in early November. While the visit itself may have fallen short of the wider expectations, the Acting Indian High Commissioner to the UK, Dinesh Patnaik, told India Inc: “In my view Brexit or no Brexit, the relationship between India and the UK is on an upward path. Brexit brings with it both challenges and opportunities. Unlike any other country, we are very much integrated into the UK. Our Indian companies are based here, they do business here and use the UK as a gateway into Europe.“So they face the same problems that British companies would face. So it is a challenge for us to see how we can work with British companies and the British government to ensure that Indian companies get a fair deal in the negotiations with the EU.”But as Dr Gareth Price, Senior Research Fellow at Chatham House, pointed out in his article soon after the referendum, the uncertainty triggered by Britain's vote is unlikely to be over any time soon.“Even though the UK voted decisively to leave the EU, there is no consensus on what Brexit means in practice,” he pointed out.And it is precisely this meaning that will most dominate deliberations in the New Year.