Brexit could trigger fall in India’s exports to UK

The Dollar Business Bureau

Chief Economic Adviser Arvind Subramanian on Sunday said he feared a decline in India's exports to Britain, following its departure from the European Union.

"Brexit came as a major shock to me. It is one of the most significant and landmark developments in the post-world war era. It would have a far reaching impact across the globe," Subramanian said while speaking at a conference in Patna.

The advisor also said Prime Minister Narendra Modi could set up an expert committee to analyse Brexit's impact on the Indian economy.

"Though our economy is well braised at present with strong macro-economic factors, Brexit would surely have some adverse impact on India. For instance, our exports would be affected. The PM may set up a committee to assess the overall impact of Brexit and long term measures to tackle it," he said.

Citing some short-term outcomes of Brexit, Subramanian said the global oil prices might come down, and the US Federal Reserve will most likely delay any interest rate hike announcement for the time being."

Referring to India’s GDP growth, the advisor said India would continue to progress in the coming years, while China would slow down considerably. "While India is expected to witness 8-10% growth in GDP over the next 10-15 years, the same for China is expected to be around 4-5% during the same period. This would happen due to normalisation of political and public institutions in both countries," he said.

Subramanian reiterated that India did not impose a heavy tax burden on its people. "The number of taxpayers in India is required to be increased from 4% to 23%, and it needs to be done without harassing the taxpayers."