BREXIT EFFECT

Spoils of Brexit for India

Abhijit Sarkar

Following the United Kingdoms

exit from the European Union as
a result of the recent referendum,
Indian big capital is dismayed in
anticipation of the contraction
of the monolithic EU market.
However, the focus must veer
from the losses for big business to
the gains for the average Indian.
The pounds depreciation in the
aftermath of Brexit can be helpful
in combating domestic inflation
in India. To some extent, Brexit
is likely to put a brake on capital
exodus and on brain drain from
India to the UK. It would also
mean cheaper and unrestrained
arms trade between India and the
UK. It makes the EU less weighty
as a cohesive politico-economic
bloc, thereby reducing its pooled
leverage against India.

Abhijit Sarkar (myabhijit@gmail.com) is an

Oriental Studies research scholar, University of
Oxford, United Kingdom.

36

y the referendum held on 23 June

2016, the majority of the British
people had democratically mandated in favour of the United Kingdom
(UK) leaving the European Union (EU). An
intriguing facet of the referendum, popularly dubbed as the Brexit referendum, was
that in addition to the UK citizens, the
citizens of the Commonwealth countries
currently living in the UK with long-term
UK visas were eligible to vote. Though
much debate as well as cantankerous
pettifoggery are inundating the press and
social media following the outcome of
the referendum, there has been only scant
discussion about the benefits or damages
of Brexit for the Commonwealth countries.
One Size Does Not Fit All
Four factors make such discussion particularly convoluted and, therefore, have been
bypassed by commentators. First, there
are 53 member countries in the Commonwealth, almost twice the number of the
28 member countries in the EU. Such a
colossal number of members makes it
indisputable that there are enormous
intra-member differences in the economic, political, and military interests and
calculations within the Commonwealth
vis--vis the UKs exit from the EU.
Second, the large number of member
countries also guarantees disparity in
the general state of development in the
member countries, which in turn, shapes
their calculations vis--vis Brexit. The
Commonwealth has developed countries
such as Canada and Australia, developing
countries like India and Malaysia, as
well as least-developed countries such
as Malawi and Mozambique as members.
Obviously, compared to the countries in
the global South, the politico-economic
fate of the developed Commonwealth
countries, which have historically been
part of the developed West, is much
more knotted with that of the UK.
Third, many Britons are oblivious to the
crucial distinction between Commonwealth voters currently staying in the

UK on temporary visas, and British

citizens with racial origin in the Commonwealth countries, who now possess
UK passports. Fourth, in relation to
this last distinction, a further subdistinction is imperative to grasp the multilayered intricacy in deciphering the
effects of Brexit on the voters from even
the same Commonwealth country. It is
necessary to recognise that those who
do not nurture any longing to settle
down permanently in the UK, indubitably have different arithmetic vis--vis
Brexit from those from the same Commonwealth country who cultivate such
a yearning.
Epistemological Imperialism
By now, it might seem to the readers that
it must have been conspicuous to the
Britons, and the continental Europeans,
that either the UK remaining in or leaving the EU cannot simply be in the interest of all Commonwealth voters alike.
But, even before the referendum had
actually taken place, I was not very sure
about the Britons or the continental
Europeans cognisance of the complexity,
or disposition in the first place, to accept
that there is multifarious intricacy in
persuading the Commonwealth voters
to vote in any unidirectional way. In fact,
in the UK, many Indians on a quotidian
basis experience a demand of loyalty
from them to the UKs interests, and an
unremitting pressure to flaunt their
gratitude to the UK as a price for the
British education or work that they have
received. Therefore, in the run-up to the
referendum, I ran an experiment on
social media, whereby I announced
publicly that I am going to vote leave as I
find that advantageous for India, a major
Commonwealth country.
What followed was revealing as well
as appalling. It turned out that for many
of the British, continental Europeans
and the citizens of developed Western
Commonwealth countries, the interest
of the UK (or Europe) automatically means
the interest of the rest of the world. They
failed to accept the basic premise of the
argument that in the postcolonial era
each country in the Commonwealth has
context-specific and unique interests and
calculations vis--vis Brexit.

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Economic & Political Weekly

BREXIT EFFECT

The conviction that the UKs interest is

essentially the interest of the world and
the mulish refusal to accept the existence of mutually-opposed interests that
a developing economy like India might
have is nothing but epistemological imperialism. This empire-building domination has been an inseparable constituent of Britains material imperialism in
the past. Notably, many westerners who
are now otherwise quite critical, even
apologetic about Britains imperial past,
do not realise how epistemologically imperialist their thought is when it comes
to their refusal to accept that what they
deem good for themselves vis--vis the
UKs membership of the EU might not be
good for many countries outside the
West. Their expectation that the Indian
voters in the UK would follow them in
their respective choice in the referendum, echoes the voice of the self-styled
benevolent Western rulers of the bygone
days who would think on behalf of the
people of the non-West, and determine
that what was beneficial for them was
thus logically beneficial for everyone.
Some hysterical dissenters even went to
the extent of calling me Hitler for refusing to accept their interest as all
Indians interest, and for insisting that
Indias interest might well be mutually
opposed to that of the UK. What conditions such a frenzied reaction in the 21st
century? The answer lies, to a considerable
extent, in the Eurocentrism of Western
schools and university curricula, which, in
turn, contributes significantly in retaining the residues of this epistemological
imperialism. British nationalism was at
the fulcrum of the squally debate around
the referendum. In connection, those who
campaigned to keep the UK in the EU, were
strategically using the term nationalist
as a blanket libel to delegitimise the separation of the fate of the Commonwealth
voters from that of the Britons.
Given Europes ghoulish past experience with Hitler-type nationalism, such
use of the word nationalist is expected.
But, on a deeper level, such a strategic use
of the term nationalist vis--vis the referendum also reeks of many Westerners
ignorance about nationalism outside
the West, which is often fundamentally
different from the genocidal nationalism
Economic & Political Weekly

EPW

AUGUST 13, 2016

in the Europe of the past, and the immigrant-phobic nationalism in presentday Europe.
The Eurocentric understanding of
nationalism fails to recognise that outside
the West, in many countries, including
India, nationalism is primarily a handiwork of the necessity to unshackle the
vestiges of colonialism. In these countries,
despite occasional aberrations, nationalism is still predominantly conceived as
a nation-building apparatus, and in the
current neo-liberal world increasingly as
an ideological commitment to shield the
most vulnerable from the onslaught of
global capitalism. This ilk of nationalism
is sans any centrifugal imperialist aspirations. The overbearing insistence on
retaining a monolithic understanding of
nationalism that emerges in the sole
light of Europes grisly history amounts
to a failure, or flagrant refusal, to accept
the multiplicity of nationalisms roots,
contexts, aims, journeys and destinations
outside the West. Ignorance is tolerable
when admitted, but insufferable when
wrapped in the arrogance of awareness.
In the aftermath of my experiment on
social media, many Western commentators whose familiarity with the Indian
case was minimal, became India experts
in minutes, and felt confident enough to
utter strong judgments about Indias
gains in the case of the UK remaining in
the EU. It is West-centric education that
arms them with this confidence, which
may well be construed as epistemological hubris.

and the Tory party, in other words,

between the left and the right in campaigning for the UK to remain in the EU. Similar
convergence was noted among those
who campaigned for the UK to leave.
Disturbingly, on the economic front,
the whole debate was eclipsed by calculations of the effects that Brexit would
have on globalist big capital. Indian big
business is now an inalienable constituent
of the global capital that seeks a common
supranational market. Most of the big
Indian capitalists treat the UK as the
springboard to the European market.
Quite understandably and expectedly,
as always, they tried overtly to project
their business interest as Indias national
interest. Their ownership over a significant segment of the Indian media proved
particularly helpful in this endeavour.
The extent of Indian crony capitalism
is such that some even felt brazen enough
to publicly suggest that the Indian Prime
Minister should step in to inveigle the
Indian voters to vote remain (De Sarkar
2016). Big business was joined by the
rich and middle-class non-resident Indians, predominantly belonging to upper
castes, who have traditionally been a
solid vote bank for the Tories, and who
have also been the core support block for
the Indian right.
Aftermath of Referendum
Against this alarming backdrop, in the
aftermath of the Brexit referendum, we
must insist that feeding the insatiable big
Indian capital is not, and cannot be, the
obligation of the Government of India.

Hunger for Supranational Market

Of course, talk of national economic
interests, particularly in the non-West, is
the eyesore of supranational capitalism.
As such, national interest stands in the
way of its ambition to have a monolithic
global market. This directly brings us to
Indias economic gains vis--vis Brexit.
Obviously, the difference between the
Indian right and the Indian left is the
key in this discussion; things do look
different depending on which side you
are standing. The recent referendum has
blurred the ideological border between
the right and the left in the UK. There
was noteworthy convergence between a
sizeable faction of both the labour party
vol lI no 33

Big Indian Capital: Many Indian companies, such as Tata Motors, are not
merely tapping the UK market, they have
actually shifted primary manufacturing
to the UK. They are treating India as a
market for the finished products.
The core capital of many of these
Indian capitalists has been amassed
primarily in India through crony capitalism, through forcible eviction of farmers, through extirpating legitimate business competition by extralegal means.
Capital thus amassed in India is then
being invested in the UK, generating jobs
in the UK. The resemblance between this
current process and the process of 19th
37

BREXIT EFFECT

century British economic imperialism in

India is impossible to miss.
Indian Immigrants: On a related note,
by the standards prevailing in India, the
overwhelming majority of the Indian
immigrants in the UK, as well as aspiring
Indian immigrants, belong to the upper
layer of Indians, as well as to the upper
castes. Of course, there are working
class Indians in the UK too, such as the
chefs and bus drivers. This section has
been adversely affected by the preferential treatment of continental European
labour in the UK under the scheme of
free movement of labour within the EU.
Nonetheless, in this connection, we
must not lose sight of the fact that an
Indian chef or a bus driver in the UK is
indisputably in a privileged and more
secure position when compared to a chef
or driver working in India.
Therefore, the current Indian government must get rid of its ide fixe with the
better-off and upper-caste Indian immigrants abroad, and must accept vis--vis
Brexit that the interest of the nonresident Indians cannot be its priority at
the cost of the working class living in
India. With regard to economic aftereffects of Brexit, the government must
turn its eyes inward to the interest of the
impecunious multitude living permanently in India.
On many accounts, the UK outside the
EU is beneficial for labour in India. The
financial wobbliness in the UK and contraction of the European market in the
post-Brexit era can be expected to
attenuate capital export from India,
which in turn might lead to the return of
some capital to India, and to inward investment. Currently, there are over 800
Indian companies in the UK (UK Trade
and Investment 2016). Deceleration of
capital exodus would augment the Indian
federal and provincial governments
bargaining power with private capital in
terms of tax exemption, free land, and
interest-free loans. However, even the
Indian big capitalists should not feel too
perturbed by the Brexit triumph, as it
has paved the path for the UK to sign
bilateral free trade agreements with
India, which she was hitherto prohibited
from by EU rules.
38

Pounds Depreciation: Further, a cheaper

pound as an outcome of Brexit has made
Indian imports cheaper, aiding Indias
import-extensive trade. The biggest political (more than economic) challenge
to all the recent Indian governments has
been domestic inflation. The single-most
important factor for domestic inflation
in India is the expenditure on crude oil
import. India pays for imported oil by
converting the rupee and the foreign
currency reserve (of which the pound
is a notable constituent) into dollars. A
cheaper pound vis--vis the Indian rupee
would mean larger pound reserves in Indias hand. The larger pound reserves
would, on the whole, set off the negative
impact of the pounds depreciation
against the US dollar. Thus, a cheaper
pound would eventually mean less spending on oil imports. If the federal government so desires, savings on oil import
can, in turn, be used in subsidising
fuel prices for commodity transport,
thereby bringing down inflation for
items of quotidian consumption such as
grains. In a country with widespread
malnutrition and chronic hunger, only a
crony capitalist of the crudest kind can
ignore this positive chain effect of a
cheaper pound.
In addition to the potential impact
on the welfare of the Indian poor, there
are macro-level military boons in question, too. The UKs egress from the EU
would allow India to have cheaper and
unrestrained arms trade with the UK, free
from EU restrictions. Such a development
would contribute to a reduction in defence
expenditure, without warranting actual
scaling-down of Indias arsenal.
Again, savings on defence expenditure can be used to upgrade the armoury
or even redirected to the civil sector.
Since the first term of the United Progressive Alliance government starting
in 2004, India has built a strategic partnership with France as a bargaining
counter against the UK. Brexit would
boost that bargaining power. On a related note, after Indias nuclear bomb
test explosions in May 1998, the UK led
the EUs economic offensive against
India. Though all the sanctions had negligible impact, the existence of such a
cohesive politico-economic bloc is, quite

understandably, undesirable from Indias

viewpoint.
In addition to the wider impact of the
pounds depreciation, at a more individual level, thousands of Indian students
in the UK who transfer Indian rupees to
their UK bank accounts for tuition fees
and personal maintenance would benefit from the pounds devaluation. However, in this connection, it must be taken
into consideration that unlike the West,
the overwhelming majority of worthy
educational institutions in India are
either fully funded, or considerably
subsidised by either the central or state
governments. The Indians who succeed
in going to the UK are almost invariably
educated at these institutions. Therefore, from the standpoint of common
taxpayers in India, the exodus of welleducated, brilliant Indian students and
staff to the UK on a permanent basis is a
brain drain and money drain. Unlike
affluent Western countries, the poor of
India cannot afford to keep paying for
the grooming of the countrys best minds
and then losing them to Western countries. The little educated, poor Indian
taxpayers are justified in expecting that
the bright minds educated with their
money would eventually help them, or
take part, in their struggles against
the discriminatory economic and sociopolitical structures.
Unbridled Mobility: Finally, unbridled
mobility between the UK and the EU
countries was one of the cardinal concerns for the British voters in the recent
referendum. However, all the Indian
voters currently residing in the UK on
visas without UK passports have always
needed Schengen visas to step out into
continental Europe. Naturally, Brexit is
irrelevant for their mobility between
the UK and continental Europe.
References
De Sarkar, Dipankar (2016): Why Indians Wont
Vote for Brexit, Livemint, http://www.livemint.com/Opinion/NVYj7jO9MvDu6iWcJBoiwK/Why-Indians-wont-vote-for-Brexit.html,
accessed on 1 July 2016.
UK Trade and Investment (2016): UK-India Explore
Opportunities and Collaborations in Creative
Industries, Government of the UK, https://
www.gov.uk/government/world-locationnews/uk-india-explore-opportunities-and -collaborations-in-creative-industries, accessed on 1
July 2016.

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vol lI no 33

EPW

Economic & Political Weekly