Brexit gain: India will emerge as 'must invest' destination

The massively adverse fallout in global markets against the backdrop of Brexit is a testament to the 'Penny Wise, Pound Foolish’ nature of the move. Brexit threatens to alter the world economic order, with resultant decline in global GDP, volatility in currencies, rebalancing of trade ties and a possibility of the UK slipping into a recession. In such a situation, it is imperative for global policy makers to take remedial measures to minimise damage. Even so, the silver lining is India emerging as the 'must invest destination’ among EMs for strategic and financial investors in the wake of global uncertainty. Over the next 1-6 months, India could very well be a significant beneficiary of this extraordinary event, given Eurozone pain points and the possibility of delayed hike in US interest rates. Therefore, this is good news in the bad news, for India.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 more adverse spillover on India given our 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. The Government’s persistence with FDI liberalisation, passage of critical reforms like the Bankruptcy Bill along with the anticipated GST Bill will help India.As both the RBI Governor and Finance Minister have pointed out, we have to wait and watch for the complete impact. India is reasonably well placed. It is not as exposed to exports as some other countries are. We have a strong domestic economy. With the monsoon looking like it is playing out the way that was anticipated, perhaps that will also strengthen domestic demand.