Indian companies with large investments in the United Kingdom are happy about the Brexit deal that the UK and the European Union have agreed. Most companies with trade ties with the UK or EU are happy that the deal could end the uncertainty that has been there for a long time now.
If the British Parliament accepts the deal, it could bring back stability to the region where trade ties have been in flux with the uncertainty. Although then Prime Minister Theresa May had thrice reached this stage with the EU nod for the deal, the House of Commons shot them down. A similar fate cannot be totally ruled out in this case also, but Prime Minister Boris Johnson is on firmer ground, having tackled some of the key issues that Jeremy Corbyn-led Labour had objected to.
The Tata Group with nearly 50 billion pounds of investment in the UK will be among the happiest corporate houses with large investments in the UK, a report in the Business Standard says. The Tata group has investments in the UK through companies such as Tata Motors, Tata Steel, Tata Consultancy Services, Indian Hotels, and Tata Global Beverages. The group's investments spiked after its acquisition of Corus Steel in 2007.
The other Indian corporate houses with a large stake in the UK include Mastek, CRISIL, Solara Active Pharma, eClerx Services, Majesco, and Rico Auto Industries. Apart from the companies that have invested directly in the UK, even other corporate houses in India have a reason to be relieved as the long-drawn Brexit uncertainty has been a contributing factor for the current slowdown.
N Chandrasekaran, chairman of the Tata Group whose marquee investment has been in Jaguar Land Rover, told Bloomberg news agency that dealing with tariffs was the "new normal" for the global auto industry. He said that negotiations around Britain's exit from the EU had taken too long. "Sometimes it's better to have clarity than a desirable result," the report cited him as saying. Tata Motors-owned JLR is likely to be affected by Brexit. Shares of Tata Motors jumped about 10 percent on the BSE on Thursday after the deal was announced, although JLR was hesitant to declare an end to the Brexit struggles of the car industry, the report says.
"We welcome the latest developments and await the next steps, but we cannot comment further until we have considered the detail of the deal and know whether it is supported by Parliament," the company said in a statement.
Tata Motors investors lost about Rs 1 lakh crore sincethe March 29, 2017, announcement of Brexit as the company's UK subsidiary, Jaguar Land Rover Automotive, has been facing headwinds. At the end of the trading session on Thursday, Tata Motors investors gained over Rs 3,800 crore.
JLR is a net exporter of finished vehicles and a net importer of auto component parts from the EU. A no-deal Brexit or a hard Brexit would have meant its models and parts would have faced steep tariff barriers, making them uncompetitive, according to the report.