'Indian economy strong enough to overcome Brexit fallout'

'With the UK voting to leave the EU, Indian companies will re-engineer their European strategy.'

Country's strong macro-economic fundamentals will help it withstand the Brexit fallout, although companies having exposure to the UK need to realign their strategies to stave off the negative impact on their businesses, India Inc said on Friday.

Confederation of Indian Industry Director General Chandrajit Banerjee said the fundamentals of the Indian economy are strong and it would be able to withstand the short-term issues that Brexit may create.

The UK voted to leave the European Union after 43 years in a historic referendum that saw 52 per cent of votes in favour of 'Leave'.

"Since India has a huge corporate investment in the UK economy, Indian firms with manufacturing or other facilities in Britain will have to realign their business plans," Assocham Secretary General D S Rawat said.

"With the UK voting to leave the EU, Indian companies will re-engineer their European strategy.

"This should not be an issue.

"India will not be affected due to Brexit if we look at a mid to long term perspective," CII President Naushad Forbes said.

However, Principal Economist at India Ratings & Research Sunil Kumar Sinha said the Indian corporates having exposure to Europe/UK either through trade or if their production units are located there, would be adversely impacted.

Banerjee felt India's strong macro-economic environment and stable, predictable and transparent policy regime would make it an attractive destination for investors in such a volatile global scenario and thereby spur growth further.

Rawat observed that it's time India buffeted its domestic firewall by rolling out crucial reforms like Goods and Services Tax to remain the most credible destination for global funds.

On frenetic selling in early trade on Friday, market benchmark Sensex nosedived by over 948 points to crack the crucial 27,000-mark, while Nifty broke below the 8,000-level after local media declared that Britain has voted to leave the European Union.

PHD Chamber of Commerce President Mahesh Gupta said the volatility in financial and currency markets is short lived as the Indian economy is resilient and sustainable on account of its strong macroeconomic fundamentals and well supported dynamic policy reforms.

"From India's perspective, Brexit will have both positive and negative impact.

"As Brexit will vitiate the already uneven and fragile global recovery, it will exert downward pressure on global commodity prices and India will benefit being a net commodity importer.

"However, with risk rising in the global financial market, foreign capital will flow out putting pressure on the rupee to depreciate and making Indian financial market volatile," Sinha said.

The image is used for representational purpose only. Photograph: Reuters