With Britain opting to repudiate its European Union membership in a high decibel referendum, global markets are facing extreme volatility. In the very near term, there could be some adverse spillover on India through financial linkages with rest of the world. However, I expect the dust to settle down soon as our policymakers have enough ammunition to ward off unwarranted volatility.
Despite regular bouts of economic, financial, and political crises globally over the last two years, India has proved its economic mettle by boosting structural and institutional factors of growth while adequately ring fencing its vulnerabilities. Government’s persistence with FDI liberalization, passage of critical reforms like the Bankruptcy Bill along with the anticipated GST Bill will help India. Additionally in the next 1-6 months India could very well be a significant beneficiary of this extraordinary event, given Eurozone pain points delayed hike in US interest rates and with India increasingly standing out as the must invest destination for strategic and financial investors. Therefore this is good news in the bad news, for India.