Brexit will impact the small and medium IT companies of Kerala with large customer base in Britain, says the Group of Technology Companies (GTech), the industry body of IT and ITeS companies in the State.

“The big question is what follows next and the UK’s roadmap for economic ties with the EU members,” said K Nandakumar, Chairman, GTech.

Uncertainty for even a period of one year will impact the fortunes of small and medium companies which rely on the UK market for more than 30 per cent of their revenue.

Positive note On a positive note, the UK having to emerge out of Brexit will seek more value-based and strategic solutions, products and services, which will open up more opportunities in the long term, Nandakumar said.

While most Indian companies have had the UK as the gateway to business in Europe, any stringent measures to free trade could necessitate trade negotiations with Germany, France, Netherlands and others. This could eventually lead to more focused gains from these regions, he added.

According to Vijay Kumar P, Secretary, GTech, Brexit is sure to have an impact to the IT industry, given that the UK accounts for about 17 per cent of the global IT exports from India.

The immediate impact will come from potential devaluation of the British pound, which could necessitate revisiting several existing contracts, he said.

“We expect the UK to further strengthen trade ties with India to compensate for the loss of preferential access to EU markets. That in turn could also free up the migration of skilled talent to Britain,” he added.

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