The EU is a political, trade and economic union that was founded in 1957 comprising now 27 countries.
EU members account for 16% of world imports and exports.
What is Brexit?
Brexit is the abbreviation of “British Exit” from the European Union ie, the country ceases to be amember of the EU and no longer enjoys membership benefits such as
- Trading with member countries without paying hefty tariffs
- Free movement across borders without imposing checks such as safety regulations and sanitary checks on food and animals.
Britain exited from the EU on January 31, 2020.
Why did Brexit happen?
Brexit was debated for a long time and opinion was divided. People who support Brexit advocate that this movement will be beneficial for businesses in the UK.
The UK will now enjoy more bargaining power at the World Trade Organization.
WTO is a place where countries negotiate the rules of international trade ie, countries can decide on the taxes on imports they want to impose and the number of goods they want to trade with other countries. Pro-Brexiters believe that the UK can now make better tariff agreements and not operate with the current EU taxation rates at the WTO – hence becoming beneficial for businesses in the UK.
Britain will be saved from contributing billions of pounds in membership fees annually to the EU
How Does Brexit affect India?
- For Indians living in the UK, the cost of living could go up as the UK renegotiates trade
agreements with EU members. Services such as phone, internet, and airfares could get dearer - There are several businesses owned by Indians in the UK who could hitherto move their goods
and services to other EU member countries without paying a hefty fee for crossing the country’s border – they may now need to shell out a fee for the same. - However, as Britain becomes an independent trade partner, it is likely that the new trade
agreement with India is drafted in a way that is beneficial to us (such as lower prices of imports
or reduction in fee for studying in Britain).