Editorial Today – India and the Brexit forecast

What is Brexit? It’s a short form for Britain exiting the European Union.

What is a referendum? A referendum is basically a vote in which everyone (or nearly everyone) of voting age can take part.

What is the EU? France and Germany, which had suffered terribly, decided to cooperate with each other so that they would not have to go to war again.

What does the EU do? The idea is to make it easier for Europeans to interact with each other.

Why does Britain want to leave the EU? Many people in Britain believe that EU is making inroads into British sovereignty.

What is India’s view on exit? India has refrained from officially commenting on referendum.

Stakes for India UK’s trade with India is part of what is known as an EU competence.

What is EU competence? The competences of the EU are divided into three categories.

Concerns of India of its outcome India remains deeply vested in the outcome of the referendum for two reasons.

Impact on Industry and border-free access Indian industry in the U.K. is thriving.

Impact on visa Work-related visa restrictions have already resulted in a fall in the number of Indian students.

 

What is Brexit?

• A referendum is going to be held on Thursday, 23 June, to decide whether Britain should leave or remain in the European Union.
• It’s a short form for Britain exiting the European Union (EU) i.e. Britain + Exit= Brexit

 

What is a referendum?

• A referendum is basically a vote in which everyone (or nearly everyone) of voting age can take part, normally giving a “Yes” or “No” answer to a question. Whichever side gets more than half of all votes cast is considered to have won.

 

What is the EU?

• The ravages of World War II led to an intense desire for peace in Europe.
•  France and Germany, which had suffered terribly, decided to cooperate with each other so that they would not have to go to war again. This led to other nations joining them. In 1950, six countries decided to share their coal and steel resources. In 1957, the European Economic Community was formed.
• Slowly, this grew into the European Union. Today, the EU has 28 member states. The first six countries were Belgium, France, Germany, Italy, Luxembourg and Netherlands. Croatia was the last to join in 2013. Britain joined the EU in 1973.
• As far as people in these countries are concerned, the EU is like a single country where transport of goods, services and people are concerned.
• The EU has its own currency — the Euro (€).
• The EU is managed by four institutions: the European Commission, the European Parliament, the European Council and the Court of Justice.

 

What does the EU do?

• Basically, the idea is to make it easier for Europeans to interact with each other. Citizens of the member countries can travel to and in other member countries without a passport or checks at the border.
• Because of the single currency, if goods are cheaper in another country, they can buy there as long as it is for their personal use.
•  Food safety and customer protection rules are common across member states, as are things like mobile data charges and internet access.
• Citizens can decide live, work, study in any of the EU member states.
• The EU’s stringent environmental and social justice rules also apply across the member states.

 

Why does Britain want to leave the EU?

• Many people in Britain believe that EU is making inroads into British sovereignty.
• One factor is money. Much of the EU’s money comes from its member states. And the UK is one of the larger contributors. The money is spent on administration of the EU in each member country, aid activities outside the EU, grants for asylum education and culture, on preserving and managing natural resources (this includes, agriculture, fishing, mining and so on), helping poorer countries in Europe and in grants to research in science and technology and in helping small businesses.
• Another aspect is laws. According to a 2010 House of Commons Library study, around 17 per cent of the UK’s laws are the result of its membership in the EU. Much of this has to do with agriculture, fishing, environmental policies, trade etc. For example, British farmers have to meet the EU standards of quality control to export to member countries. EU’s agriculture policy lays down the law on GM crops, animal husbandry and even how much of his field a farmer must leave fallow to get subsidies.
• Another example is the fishing policy. There is a 200-mile fishing zone around the UK coastline. Under EU law, UK fishermen can fish only up to a specific quota and fishing fleets from other EU countries are given equal access to the zone. The UK boats get an exclusive 12-mile zone. Now if the UK left the EU, the 200 mile zone will be back in its control though it may have to have individual agreements with countries that want to fish there.

 

What is India’s view on exit?

• Unlike many other governments of countries with strong economic and historical ties with the United Kingdom, India has refrained from officially commenting on the crucial European Union (EU) membership referendum to be held on June 23.

 

Stakes for India

• According to some experts EU was the biggest obstacle to U.K.-India trade. UK should be doing much more business with India with its middle class of 200 million people, but UK can’t because trade with India is part of what is known as an EU competence.

 

What is EU competence?

The competences of the EU are divided into three categories:

• Exclusive competence- Only the EU can act
• Shared competences- Shared between the EU and the member states (The member states can act only if the EU has chosen not to)
• EU has competence to support, coordinate or supplement the actions of the member states – in these areas, the EU may not adopt legally binding acts that require the member states to harmonise their laws and regulations.

 

Concerns of India of its outcome

India remains deeply vested in the outcome of the referendum for two reasons.

•  The first concerns the welfare of a nearly three-million strong diaspora of Indian-origin U.K. citizens.
• The second concerns the interests of a large moving population of Indians who come to Britain ever year as tourists, business people, professionals, students, spouses, parents and relatives.

Because with brexit, the rules of doing business, or of access to higher education might be changed. Further, it might create new barriers for work visas or the visitation rights of relatives who have families here.

 

Impact on Industry and border-free access

• Indian industry in the U.K. is thriving. There are 800 Indian companies in the country,  more than the combined number in the rest of Europe. According to the India Tracker 2016 commissioned by the Confederation of Indian Industry (CII), Indian companies generate 110,000 jobs.
• Uncertainty surrounding the U.K.’s impending EU referendum and the possibility of ‘Brexit’ may have a bearing on both the UK economy and on Indian companies.
• Also might affect appetite for investing in the U.K., particularly those seeking access to the European market.

 

Impact on visa

• Work-related visa restrictions have already resulted in a fall in the number of Indian students studying in British universities from 22,385 in 2012-13 to 18,320 in 2014-15, according to the U.K. Council for International Student Affairs (UKCISA).
• Given their tough stance on cutting immigration, a Brexit government could be expected to make such curbs more stringent.