On Thursday, citizens of the United Kingdom will vote in a referendum on whether their country should remain or leave the European Union, ending weeks of intense campaign by both sides in what has been referred to as "Brexit" debate.
While any outcome will have far-reaching implications on the UK, and to an extent on the EU, it is not immediately clear in which way the result is going to affect India. The country has not officially made its stand clear on the debate, but External Affairs Minister has made it clear that the UK is India's gateway to Europe.
As Britain gets ready to vote in a landmark referendum, which could shape the future of the country for generation, here is all you need to know about the subject.
What is Brexit?
It is a combination of two words “Britain” and “exit,” referring to British exit of the European Union after the June 23 referendum asking voters: “Should the United Kingdom remain a member of the European Union or leave the European Union?”
Voters will have the option of putting an “x” next to one of two answers—"Remain a member of the European Union" or "Leave the European Union".
It was at first a simple "yes or no" question, but critics said the question would cause confusion among voters and is unfair, particularly to those who want to stay in.
When will the result be known?
The polls close at 2:30 am (IST) on Friday and the results are not expected to be known until around 11:30 am on Saturday. The side that gets the most votes wins.
What caused the debate?
Prime Minister David Cameron promised to hold a referendum to determine Britain's fate in EU if he won the 2015 general election. The assurance came in response to growing resentment among the Britons who grew tired of the fact that half the laws in Britain is being drawn up by those sitting in Brussels, the de-facto capital of the European Union.
The pro-Brexit camp mainly use two key arguments in support their case—the fact that Britain is unable to do things without having to consult Brussels and the “threat” to its cultural, national identity caused by the sudden influx of migrants, who make use of the fact that UK can’t close its borders in the way it wants.
More than 200,000 UK businesses trade with the European Union and and more than 3 million jobs are linked to that trade. Europe is Britain’s most important export market and its greatest source of foreign direct investment. A British exit would jeopardize that status.
Who wants to leave and who wants to stay?
According to the latest opinion polls, the British public are evenly divided on the referendum.British Prime Minister and the leader of the Conservative Party, David Cameron wants to remain, but about 38 per cent of Conservative MPs have declared that they want to leave. The Labour Party is also split: Leader Jeremy Corbyn wants to remain The UK Independence Party, which won the last European elections, and received nearly four million votes - 13% of those cast - in May's general election, campaigns for Britain's exit from the EU.
What if Britain votes to remain in EU?
Prime Minister David Cameroon, who has been a strong supporter of the “in” campaign is expected to resign.
What if Britain votes to withdraw from EU?
There is no clear road map for Britain's divorce from EU. There is a general consensus that it will hurt its economy. German Chancellor Angela Merkel has made it clear that Britain will enjoy no special consideration if it decided to leave EU. That means it will have to negotiate new trade deals with EU just like third-party countries like the US or Canada. Also, Britian will have to enter into new agreements with countries that have trade deals with the EU.
Impact on India
The EU referendum is a cause for concern for India considering its strong economic ties with the UK. Britain is the third largest investor in India and there are more than 800 Indian-owned businesses in the UK. Britain was a gateway for Indian investors into the rest of Europe. However, if UK chooses to exit from EU, Indian companies which seek access to the European market may be reluctant to invest in that country. Britain's EU exit may also cause an instability in the market which may lead to fluctuation in pound and euro rates.
However, many feel that such an exit will bring up a lot of uncertainty within Europe and will definitely opens up opportunities for India. Besides, with EU exit, British universities will not have to provide scholarships to EU citizens which will free up funds for students from other countries. This will help more number of Indian students get scholarships for studying in the UK.