Brexit Effect on Global Economy-2016

                  BREXIT EFFECT ON GLOBAL ECONOMY-2016                                                                              

The united kingdom on 23th june 2016 voted in a refrendum on the country's European Union membership and 51.9% of voters choose the option of leaving the European Union. Frequently refered to as "Brexit". The refrendum effected the Global market as well as effected the British pound,causing the British pound to fall to its lowest level in decades.Apart from causing a sharp,short term hit to Britain's economy the first consequences of vote to leave European union was a government crisis.Prime Minister David Cameron who supported the United Kingdom remaining in the european union resigned on july 13th as a result Home Secretary Thersa May Leader of conservative party become the Prime Minister.     

 The economic scenario in Britain is,if anything gloomier than that pointed by the economist who advised against the divorce from the European Union.The pound has sunk to its lowest value in 31 years against the U.S dollar.The devaluation of pound well mean that imported goods and services will be costlier for the British people.Over time London has become the hub of Financial network in Europe.An Important reason explaining the growth of United Kingdom Financial sector has been "European Passport Scheme" under which Financial services firms located in one member state can carry out business activities in another member state without having to incur the additional cost that are normally associated with a "foreign entity".That huge advantage will be lost once Brexit is formalised. Trade and manufacture official trade statistics shows that the European Union is the destination for half of all Britain goods exports.The trading link are bigger if we include the cuntries that the United Kingdom trades freely with because they have a free trade agreement with the European union.

It is highly probable that a favourable trade agreement would be reached after Brexit as there are advantage for both side in continuing a close commercial arrangment.But the worst case scenario Britain may face tarriffs charges on its export.It was predicted that the production sector would face more uncertain outcome than services.On the contrary the impact of Brexit on European Union will be that the brexit vote could strength anti-immigration parties throughout Europe which could lead to the destruction of European Union.If these parties gain enough ground in France and Germany they could force an anti-E.U vote.If either of those countries left,then European union would lose it strongest economies and would dissolve.

Not only Brexit impact will be faced by United Kingdom but also it will be faced by whole world.It's impact on India will be that it will surely accelerate the Europe's interest to develop India as a strong trade and strategic partner.Not only they need to counterbalance United States and China geopolitically but also need to protect themselves against a slowing China for its economic interst.India is presently the second biggest source of FDI (Foreign direct investment) for Great Britain.The main reason for this is the historical and cultural ties with the United Kingdom along with the fact that United Kingdom proved to be a gateway into the rest of Europe.

Britain is one of the most sought after education destination for Indians.Before Brexit,British universities were forced to offer Scholorship and subsidies to the citizen of United Kingdom and European Union.Brexit frees up funds for other student and more Indian might be able To get scholorship.Reduction in pound value will reduce travelling cost to the United Kingdom and will make it a good travel destination.Brexit might impact India-United kingdom trade relation too.United Kingdom is listed 18th among India's top 25 trading partners.After brexit India may increase it's export to the United Kingdom.