What does Brexit mean?

It is a word that has become as a shorthand way of saying the UK leaving the
European Union (EU) merging the words Britain and exit to get Brexit.
What is happening ?
A referendum is being held on Thursday, 23 June, to decide whether Britain should
leave or remain in the European Union.
What is the European Union ?
The European Union often known as the EU is an economic and political
partnership involving 28 European countries. It began after World War Two to foster
economic co-operation, with the idea that countries which trade together are more
likely to avoid going to war with each other.
It has since grown to become a single market allowing goods and people to move
around, basically as if the member states were one country. It has its own currency,
the euro, which is used by 19 of the member countries, its own parliament and it
now sets rules in a wide range of areas including on the environment, transport,
consumer rights and even things like mobile phone charges.
With GDP of more than $18,000 bn and a population of more than 500 m, it is the
biggest economy in the world. Member states remain the most powerful actors
within the EU with Angela Merkel, German chancellor, the blocs most powerful
leader.
What is a referendum ?
A referendum is basically a vote in which everyone (or nearly everyone) of voting
age can take part, normally giving a Yes or No answer to a question. Whichever
side gets more than half of all votes cast is considered to have won.
Why is a referendum being held?
Prime Minister David Cameron has promised to hold a referendum if he won the
2015 general election, in response to growing calls from his own Conservative party
MPs and the UK Independence Party (UKIP), who argued that Britain had not had a
say since 1975, when it voted to stay in the EU in a referendum. The EU has
changed a lot since then, gaining more control over their daily lives, they argued.

Mr Cameron had said: It is time for the British people to have their say. It is time
to settle this European question in British politics.
Who Will be able to vote ?
You are eligible to vote if you are a British, Irish or Commonwealth citizen over the
age of 18 and you are resident in the UK. You may also vote if you are a UK
national who has lived overseas for less than 15 years.
Who wants the UK to leave the EU?
The British public are fairly evenly split, according to the latest opinion polls. The
UK Independence Party, which won the last European elections, and received nearly
four million votes 13% of those cast in Mays general election, campaigns for
Britains exit from the EU. About half of Conservative MPs, including five cabinet
ministers, several Labour MPs and the DUP are also in favour of leaving.
Why do they want the UK to leave?
They believe Britain is being held back by the EU, which they say imposes too many
rules on business and charges billions of pounds a year in membership fees for little
in return. They also want Britain to take back full control of its borders and reduce
the number of people coming here to live and/or work.
Would Britain be better in or out?
It depends which way you look at it or what you believe is important. Leaving the
EU would be a big step arguably far more important than who wins a general
election but would it set the nation free or condemn it to economic ruin?
Key Arguments for Stay
Foreign affairs:
As part of a 500 million-strong economy, Britain has greater influence over
international matters.
Sovereignty:
Britain has proved that it can opt out of EU policies it considers counterintuitive,
such as the euro, the Schengen Agreement and enforced migrant quotas.
Security:

A union better equips Britain to tackle threats to security, including terrorism and
cross-border crime.
Money:
Europe provides Britain with billions of pounds worth of investment each year.
Trade:
Membership in the EU gives us the strength to negotiate favourable trade
agreements with countries around the world.
Business:
Free trade within the EU reduces barriers and enables UK companies particularly
small ones to grow.
Jobs:
Millions of jobs linked to Britains membership would be put at risk.
Consumer goods:
The average person in Britain saves hundreds each year thanks to lower prices of
goods and services facilitated by the EU.
Key Arguments for Leave
Foreign affairs:
EU membership limits Britains international influence, ruling out an independent
seat at the World Trade Organisation.
Sovereignty:
Britain would have more control of its laws and regulations, without risk of having
counterintuitive policies forcefully imposed.
Security:
Britains domestic security would benefit more from greater border control than
political union.

 Money:
Britain contributes billions of pounds in membership fees to the EU every year.
Trade:
Membership in the EU keeps Britain from fully capitalising on trade with major
worldwide economies like Japan, India and the UAE.
Business:
The EU subjects Britain to slow and inflexible bureaucracy, making it more
prohibitive for smaller, more innovative companies.
Jobs:
Improved global trade agreements and more selective immigration would have a
positive effect on the British job market.
Consumer goods:
The average person in Britain lose hundreds each year owing to policies regarding
VAT contributions and agricultural subsidies.
Impact of Brexit on India
Despite being a ludicrous proposition, countries across the world must address the
contingency of a Brexit. If it does happen, it will have wide-ranging repercussions
on every country that is remotely connected with the global financial market. Here
are five ways in which India will be affected:
1. The uncertainty following Brexit: The biggest drawback of the Leave
Campaign is that they have not mapped out the future course of action if Brexit
indeed happens. There is no sound plan regarding Britains future relationship with
the EU or any other specific country within the EU.
If Brexit does happen, global financial market volatility can be readily expected.
Markets across the world will tank. The pound will depreciate against most major
economies. India cannot remain immune to this. Sensex and Nifty will tumble in the
short-run.
2. Investment: India is presently the second biggest source of FDI (Foreign Direct
Investment) for Great Britain. One of the main reasons for this is the historic and

cultural ties with the UK that India shares along with the fact that the UK proved to
be a gateway into the rest of Europe. Indian companies that would set up their
factories in the UK could sell their products to the rest of Europe under the
European free market system.
However, if Britain exits the EU, it will not be as attractive a destination for Indian
FDI as before. Having said that, Britain would not want to lose out on capital
coming in from India. Thus, one can expect Britain to try extra hard to encourage
Indian companies to invest there by providing much bigger incentives in terms of
tax breaks, lesser regulation and other financial incentives. Further, if Britain is
leaving the EU due to the latters complex bureaucratic regulatory structure, Indian
companies can expect a deregulated and freer market in Britain.
3. Another EU partner: If Britain exits the EU, India will lose its gateway to
Europe. This might force India to forge ties with another country within the EU,
which would be a good result in the long run.
India is already trying to build trade negotiations with Netherlands, France,
Germany, and others, albeit in a small way. Netherlands is Indias top FDI
destination as of now. A Brexit could force India to build trading partnership with
other EU nations in order to access the large EU market.
4. The Commonwealth: With Britain cutting off ties with the EU, it will be
desperate to find new trading partners and a source of capital and labour. There
have already been many proponents of the Leave Campaign that suggest that the
UK should look towards the Commonwealth to forge new alliances.
Britain will still need a steady inflow of talented labour, and India fits the bill
perfectly due to its English-speaking population. With migration from mainland
Europe drying up, Britain would be able to accommodate migration from other
countries, which will suit Indias interests.
Further, Britain is one of the most important destinations for Indians who want to
study abroad. Presently, British universities are forced to offer subsidized rates for
citizens of the UK and EU. With Brexit, however, the universities will no longer be
obliged to provide scholarships to EU citizens, which will free up funds for students
from other countries. Many more Indian students may be able to get scholarships
for studying in the UK.
5. Ties with European Union: With or without a Brexit, it would be in Europes
interest to develop India as a strong trade and strategic partner. Brexit would surely
accelerate this process. Europe needs to counterbalance United States and China

geo-politically and would also need to hedge against a slowing China for its
economic interests.
For this, Europe would be looking at the fastest-growing major economy in the
world and would need to quickly resolve the pending trade issues with India in
order to develop a lasting relationship.
Thus, even though Britain stands to suffer from leaving the European Union in
terms of reduced trade and a sustained drop in its GDP, the net effect can turn out
to be positive for India.