New Delhi, June 24 (IANS) As stakeholders expressed concern over the Brexit referundum, which led to a crash in global financial markets, Finance Minister Arun Jaitley and Reserve Bank of India (RBI) Governor Raghuram Rajan sought to calm the frayed sentiments.
“As regards the Indian economy, we are well prepared to deal with the short and medium term consequences of Brexit. We are strongly committed to our macro-economic framework with its focus on maintaining stability,” Jaitley said.
“Our macro-economic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline, and declining inflation. Our immediate and medium-term firewalls are solid too in the form of a healthy reserve position,” he added.
In a similar vein, Rajan said: “The Indian economy has good fundamentals, low short term external debt, and sizeable foreign exchange reserves. These should stand the country in good stead in the days to come.”
“The RBI is continuously maintaining a close vigil on the market developments, both domestically and internationally, and will take all necessary steps, including providing liquidity support (both dollar and Indian rupee), to ensure orderly conditions in financial markets,” he added.
Views of other stakeholders:
Arundhati Bhattacharya, chairman, State Bank of India:
Uncertainty of any sort results in volatility and Brexit will be no exception. As risk aversion sets in, there would be a decline in financial markets and India would see this impact along with other nations. However, as trade strategies are reworked there could be potential advantages in the form of better market access for India to European Union (EU) and the UK.
Naushad Forbes, President, Confederation of Indian Industry:
India invests more in the UK than in the rest of Europe combined. With the UK voting to leave the EU, Indian companies will re-engineer their European strategy. This should not be an issue. India will not be affected due to Brexit if we look at a mid to long term perspective.
D.S. Rawat, Secretary General, Associated Chambers of Commerce and Industry of India:
India is relatively safe thanks to its macroeconomic stability reflected by low current account deficit, comfortable foreign exchange reserves and improved GDP prospects with advancing Monsoon.
Mahesh Gupta, President, PHD Chamber of Commerce and Industry:
Volatility in financial and currency markets is short lived as Indian economy is resilient and sustainable on account of its strong macroeconomic fundamentals and well supported dynamic policy reforms.
R. Chandrashekhar, President, National Association of Software and Services Companies:
The impact of Brexit will certainly be negative in the short-term on account of volatility in the exchange rate, uncertainty in the markets and the terms on which Britain will leave the EU.
Sunil Prasad, Secretary General, Europe India Chamber of Commerce:
It will definitely be a temporary setback for Indian companies with operations in the UK but this will also open up new pathways for India to start bilateral trade negotiations with individual countries.