The Centre on Friday said it will provide all support to Indian corporates that are headquartered in the UK or Europe in reviewing and changing their operational plans, if required following the Britain’s decision to leave the European Union.

“These companies will have to rethink their operations as trading relations will change…we will support all of them through our High Commission, Ministry of External Affairs, and Department of Commerce. New arrangements will also be negotiated,” said Minister of State of Finance Jayant Sinha.

Three strategies

This is part of one of the three strategies that the Centre will adopt to soothe markets and investors while the transition in Europe takes place.

Sinha, however, noted that the markets will continue adjustments over the next one or two weeks. “A lot of adjustment happened today (Friday). Our goal is to ensure adequate adjustments in the market,” he noted.

He also said the Centre will work to renegotiate trading arrangements with the UK and the European Union after the two have reworked their own relations. While stressing that investors are satisfied with India’s macro-economic stability, he said that the Centre will continue with economic policies and reform agenda. “The growth and reform agenda will continue. If we are able to pass the goods and services tax, it will be very positive for India,” he said.

Silver lining for India

Expressing surprise over the results of the referendum in UK, the Finance Ministry’s Chief Economic Adviser Arvind Subramanian, however, said it can be a “silver lining” for India in terms of low oil prices and lower chances of interest rate hike in the US.

“Let’s not see this as unremittingly gloomy. There are a couple of silver linings. Oil prices have come down. That’s good for India’s macro situation,” Subramanian said as he tried to calm down investors, adding that with the uncertainty, it is less likely there would be interest rate hike in the US.

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