NEW DELHI: Indian companies doing business out of the United Kingdom into the European Union can rest easy for the time being as the Brexit deal will allow most of them to continue flourishing as it allows them to sell to EU markets not only at zero customs duty but also without any quotas being imposed.
India has some 850 companies, with a combined revenue of GB Pounds 41.2 billion($56.1 billion), in the UK. These firms, spread over steel, automobiles, pharma and engineering were on tenterhooks over the final shape of Brexit.
The zero tariff deal is especially significant for Tata Motors as otherwise, Jaguar Land Rover products sold in Europe would have faced a 10 per cent duty from January.
Among Indian firms who are setting up large projects in the UK, Mahindra-owned Pininfarina, the iconic Italian design firm, is partnering British Volt to build the UK’s first large-scale battery gigaplant.
The deal will allow such units to sell to EU not only without tariffs also without any quotas.
“This will help the large Indian investments in pharma, steel and engineering in the UK as there will be no limits to the volumes they can sell into EU,” said Prof. Biswajit Dhar, a former member of the Board of Trade.
While the outlook for the services sector is still unclear, as the fineprint is still being studied, Indian software giants who have UK registered arms do not see any immediate disruptions as the Brexit deal provides UK firms with legal guarantees that they will not face any disruptions to trade while selling their services in the EU.
Shivendra Singh, vice-president and head – global trade development at Nasscom said, “We are yet to study the fine-print, but as far as sending professionals onsite to locations Europe where our firms have projects, most of our companies do so from India and rules for them will remain the same.”
Agreed technology and start-ups consultant and former Nasscom vice-president Prasanto Kumar Roy. “I do not see a major challenge… This could also actually open up more opportunities and deals with the UK itself for Indian IT firms.”