Indian Minister Arun Jaitley Says Brexit Impact On India Limited
Wednesday, 29 June 2016 - 10:30
The impact of the Brexit vote on India would not be significant, as the underlying fundamentals of the economy were robust, Indian Finance Minister Arun Jaitley told foreign media.
The U.K. voted on Thursday to leave the European Union (EU), in a decision that left global financial markets reeling and raised doubts over the fate and composition of the economic and political bloc.
Concerns that the financial market ructions would spill over to the global economy also rocked assets in emerging markets including India, which is the world's fastest-growing major economy.
Jaitley appeared sanguine, however, tipping normalcy to return in the coming days.
"If you have strong fundamentals in terms of deep foreign exchange reserves, a high growth rate, somewhat restrained inflation, a not significant current account deficit and maintaining fiscal discipline. If all these parameters are met, as they are in India, I think the impact will not be significant," Jaitley told CNBC in an interview.
"After all, it's going to be the same U.K. and the same European Union, except that you'll have to trade with them separately and you'll have to deal with them separately. That's the next impact," he said.
"And I think once the world is able to figure this out over the next few days as the situation settles down, the economies in terms of both stock markets and currencies will start leveling out."
Still, Jaitley noted that Indian companies with significant operations in the U.K. would have to tailor their businesses accordingly to deal with the fallout.
Jaitley added that the government remained committed to ushering in more reforms, allaying concerns that the departure of Reserve Bank of India Governor Raghuram Rajan reflected wavering appetite for measures aimed at making the economy more competitive, Indian media reports.