India Inc will be hurt, Indian immigrants may benefit but the overall Anglo-Indian relationship will decline with Brexit. Britain’s possible withdrawal from the European Union following a referendum in June 23 is a mixed bag for India, but likely to be a net negative.
If the “leave” campaign wins, the immediate impact will be on the world’s capital markets – and India will fare poorly. Already, global capital is seeking safe havens as it fears a fall in the value of the sterling and the euro. The nonconvertible rupee will be expected to lose value and so will be dumped – even though both capital flows and the exchange rate are likely to recover.
One currency the rupee will gain against will be the pound. An informal survey of Mumbai forex traders comes up with an expectation of a 15 to 30% drop in sterling’s value if the “leave” campaign wins.