The effects of post-Brexit on India and Indo-UK relations can also be understood through some other points. The effect of this can be seen as currency volatility, as there is a possibility of devaluation of pound and euro. According to some economists, there is a possibility of a 20 percent fall in the pound, this may cause a lot of damage to Indian companies which are getting growth in the UK. However, the Government of India is assessing the effects of currency volatility on the overall trade in the short and medium-term. But the Government of India will need to re-work on 'single-currency block' as well as free trade, keeping the Brexit in mind.
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After Brexit, commodity and crude oil prices are likely to remain weak for a long time. This situation will be favorable for India. Britain will be comparatively weaker after Brexit and will need more trade and investment partners. In that case, India can play an important role in the British economy, but how much will this situation be in the interest of Britain itself? The relationship between the two countries will be guided by this skeptical result. Brexit will also have an impact on global economic growth. This will weaken, so commodity prices should fall. This situation should have a mixed effect on India. But after Brexit, there is a possibility of a negative impact on the revenue of many companies including the Tata group of India.
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The UK has been like a Gateway of the EU for Indian companies. Therefore, Brexit can create a short-term crisis for Indian companies. Since there is a possibility of instability in the global financial market, it can cause shrinkage in the markets around the world. Since the pound will be weaker against the currency of major economies which will need to be strengthened. India cannot strengthen this alone, that is, it will have to compete harder with other big economies. The Sensex and Nifty are also expected to undergo short-term pressures due to this change.
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