India avoided adverse Brexit effect: Jaitley

Wednesday 27th July 2016 05:50 EDT
 
 

Finance Minister Arun Jaitley said India has avoided any adverse impact of Brexit and emerged as a safe haven for investors around the world. Addressing the Lok Sabha, he said the government, the Reserve Bank and market regulator Sebi were keeping an eye on the global developments with a view to protecting interest of investors.

"The government has assessed the impact of Brexit on the Indian economy. Thus far, India has not only avoided adverse impacts, but it has in fact emerged as a safe haven for investors around the world," said Jaitley. He added that the rupee depreciated against the US dollar by around 1 per cent for one day post-Brexit referendum while currencies of other emerging markets depreciated for many days. "By virtue of its domestic policies, India is seen as a haven of stability and opportunity in these turbulent times," he said.

India's good exports to the UK and the EU have been around 3 per cent and 17 per cent of our total exports, respectively. India also exports somewhere around $10 billion in software to both the UK and EU. Jaitley said the potential effect on India's growth could be offset by the weaker price of oil, which will help maintain macro-stability, and by the likelihood of more policy support in the advanced economies.

"The impact of Brexit on trade, if any, in the medium term, would also depend on bilateral trade negotiations that will determine India's future market access to these countries," the FM said. "Sebi has laid down various regulations, and guidelines for protecting investors' interest and ensuring orderly functioning of the stock market."


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