What is Brexit?
Brexit is literally British Exit (from the EU – European Union) and is favored by the majority of the voters in the UK. British and European leaders shall negotiate the terms of Britain’s departure based on the result of the Referendum deal held on June 23.
About European Union :
After world war 2, a movement was created for the alliance of 28 European countries including UK in 1993. EU operates single market and allows free movement of goods, services and people between the member states.
Why Britain departed from EU :
In 2008, a financial crisis occurred, resulting a recession in Europe. As a result, unemployment rose and tax revenue fell. Banks needed bailouts. The financial crisis of EU were uneasy for the wealthy nations like UK. Also, the employment opportunities in Britain got the attention of other European nations, and they started migrating to England. This was also the major fact that made the British voters to leave the European Union.
Votes that decided whether to remain or to leave
The vote for leaving – 51.9% (17,410,742)
The vote for staying – 48.1% (16,141,241)
More than 30 million people have voted.
What Article 50 claims :
According to Art-50 of the European Union treaty, the state should be notified and obliged to try to negotiate a withdrawal agreement. However, the Brexit doesn’t represent this notification. It could take place within days. Hence, the vote is not legally binding and still can be theoretically blocked.
Consequences of this step :
1- The departure resulted in the resignation by the British PM David Cameron as he had not wished the country to exit from the EU.
2- The possibilities are that the next PM could be Boris Johnson, a member of Cameron’s conservative party & formal London Mayor.
3- The products, services and people of British could be in danger, losing it’s easy entry into other European countries.
4- About 1.2 million British people currently live in other EU countries. Immigration would be more complex issue resulted by the Brexit.
Impact on Indian Economy :
Sources are that there won’t be much chaos between India and UK in terms of trade and business, but the outsourced factories & offices in India might be recalled to Britain to create job opportunities. Since India is the largest investor of FDI (Foreign Direct Investment) in UK, it is obvious that UK will have to keep lesser regulation to India for the growth of their economy. However, Indian companies would be dealing with two sets of laws – European Union and Britain.