The world as we know it changed significantly today as Britain voted for Brexit but also threw up a historic opportunity for India and the UK to chart their own course within this new emerging scenario in Europe.
India and the UK must work proactively to build on their strategic partnership and seek a new kind of union with the wider the European Union (EU) community. Just as the UK's Remain camp had stressed, it is not a binary decision - India has the right credentials to strike lucrative agreements with the UK as well as the EU. The one thing that is a given is that doing nothing is not an option for Indian business and political interest.
India must not allow itself to be a disinterested bystander. It has to be a key player as the UK and EU muddle forward to find their new terms of engagement. China will most definitely be prowling to swoop on trade pickings to establish a strong geo-political interest in the region on the back of the uncertainties unleashed in the short-term. India has a better offering in its soft power in the form of the 1.2 million strong Indian Diaspora based in the UK.
These voters had reflected the UK's own neck and neck divide during the referendum campaign and while a significant number may not have voted for Brexit, they will all be instrumental in helping India and the UK navigate through troubled waters. And if David Cameron's Indian Diaspora Champion, Priti Patel, is to be believed: "India is a growing market with the fastest growing working age population of any other major economy - but it is a market that we are forbidden from striking a trade deal with because it is against EU rules... After we Vote Leave, the UK would be free to negotiate its own far-reaching trade deals with India and dozens of other growing economies. It will be a boost to India-UK ties.”
While Britain's exit from a 59-year-old institution that has worked towards a common market and common interests may be disappointing, it is important India looks beyond the period of immediate uncertainty and market volatility. Prime Minister Modi will lose a personal friend with Cameron′s own exit from Downing Street but the UK still remains the fifth biggest economy of the world, with well-entrenched and established institutions. It is not going anywhere and as the largest cumulative investor in India, it should not be allowed to go anywhere. India is the third-largest investor in the UK and for decades India has seen London as the gateway to Europe, with 50 per cent of all Indian investment across the EU concentrated pouring into the UK. None of these facts will be overturned overnight.
The real concern over the longer term is the impact the vote will have on Indian companies that have or are planning to set up shop in London as an entry point to the EU. Several Indian IT, pharmaceuticals, automobile and metals companies have a presence in the UK. It is not clear yet how the Brexit referendum result will affect their operations across Europe.
However, London is expected to retain its position as the world's pre-eminent financial centre and this will continue to attract Indian companies to the UK capital. India's bilateral trade with the UK stands at 14.2 billion pounds. There is a school of thought that feels London could give incentives to improve trade ties and this could help Indian companies. Britain's exit from the EU could cause some collateral damage to multilateral trade blocs. If Britain's example is followed by other states such as the Netherlands, Italy, Denmark and France, it could bring into question the very existence of the common European market. If EU unravels, it could have a domino effect on other trading blocs around the world.
Meanwhile, the coming years as the UK disentangles itself from the 28-member economic bloc to go it alone mark an important period of reflection and reassessment for India. India needs to stop looking at the EU through the UK prism and start dealing directly with both entities to strike strong trade and investment deals. The Indian High Commission in the UK, which for many years has failed to give economics and business prime importance with a strong diplomatic posting, needs to change that to convey India's commitment to aggressively assert its interests at the negotiating table with the UK.
Similarly India's embassies across the EU should redouble efforts to ensure the conclusion of the long-pending India-EU free trade agreement (FTA). Most importantly, this is a time to ensure Britain is not seen as drawing up the draw-bridge to global talent. In fact, there is immense untapped potential in India and the UK striking partnerships to work together in other growing markets in Africa. It is important India offers the way forward amid some of the doom and gloom unleashed by Brexit.
Manoj Ladwa is the Chief Executive of India Inc. @manojladwa