The group operates 19 companies across the continent, with over 60,000 employees
More than anything, it's the uncertainty that hurts business.
And for the Tata group, which has been present in Europe since 1907, the questions around Brexit since it was announced in 2016, had created pain points for some of its largest businesses, including Tata Motors, Tata Steel and Tata Consultancy Services.
That is why the announcement of a Brexit deal between the UK and European Union is a welcome development for the conglomerate. Tata is among the biggest employers in the region. It is also among the highest investors, spending about $60 billion in the UK alone over a little over a decade.
"Of late, in the UK, there has been delays in taking decisions due to the uncertainty. People are watching and waiting," the Chief Financial Officer had said.
In 2016-17, the Tata group had international revenues of $64.40 billion, 64.1 percent of its total revenues, with the UK and the US being the two main overseas revenue contributors.
The group operates 19 companies across Europe, with over 60,000 employees. "In the UK, Tata is among the largest industrial employers, operating in over 40 locations. Jaguar Land Rover, Tata Steel and Tata Motors are leading Tata companies in the region," says the Group website.
Tata Steel: Its European unit makes 10 million tons of steel a year. The UK facility manufactures 3 million tons a year. A possible JV deal with thyssenkrupp was turned down by the regulators, a significant setback for Tata Steel.
Tata Motors: Its JLR has earmarked investment of $50 billion in the UK till 2023, but that is under the cloud till the Brexit deal terms get clearer. About 16 percent of Tata Motors revenue come from the UK.
TCS: After the North American market, the UK and continental Europe are the biggest revenue generators for the software company. According to a Business Standard report, 15 percent of its revenues come from the UK market.
As Ramakrishnan pointed out, the doubts around Brexit had slowed down decision making, and thus investments among companies. This impacted service providers like TCS.
Also, manufacturing companies such as the JLR and Tata Steel will need to understand how the movement of goods between the UK and the rest of the European markets get impacted.
Both the companies have significant presence across the European markets, and any deal between the UK and the EU will have major impact on costs and revenue calculations. JLR for instance imports a significant percentage of the parts it requires for production, and any movement in exchange rates post the deal will impact costings.
Brexit, despite the agreement between the UK and EU, is not a done deal yet.The UK premier has a tough challenge ahead, as he needs a majority support for the deal from the House of Commons. That is easier said than done, given the varying opinions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.