Russia -Ukraine war Impact on Indian Economy

Indian economy is said to be a globalised one, and international shocks would have a tremendous impact on the systems and businesses in the domestic economy. This is having a lot of impact across the globe since both of these nations have a significant amount of contribution in terms of trade and commerce. There is also a significant impact in terms of the Indian economy as well.

Considering our population there is a huge consumer base for vehicles-big and small. When we look at it from the running costs, fuel is said to be one of them. Russia is one of the main counterparts for the imports of oil, and with this crisis in place, it does have a pinch in terms of the rising prices. With the escalation in the war, it becomes a major problem in terms of controlling the prices. With prices rising to close to $100 per barrel it's now adding a lot of pressure with the ministry of finance, in terms of controlling the prices. Talks, to prevent this situation from escalating to greater heights is ongoing.

There is also a lot of pressure in terms of financial regulations especially the macro indicators of the nation being tested in the current times. Inflation is one of the important factors. Trade is also one of the facets being affected. Our exports have drastically decreased in recent time, owing to the crisis. Our major exports of electrical equipment and machinery have drastically declined in both Ukraine and Russia, to .8 and .1 percentage respectively. With the rising fuel imports, our current account deficits are at their pressure point.

Russia has been an important trading partner for India, especially in terms of the imports of steel and edible oil. With its rich deposits of mineral resources like iron, nickel. palladium, none of these can be imported to India, due to the sanctions that are being imposed. With the demand for steel starting to slowly grow in our country, as the economy is showing signs of recovery, the prices are one factor that is hurting India in a big way. An alternative route is the only option right now for our country at this juncture. In the case of edible oil, where India imports close to 20 lakh tonnes from both the nations combined, has hit our household expenditure as well.

The automobile sector also has impacted our economy a great deal. With the chip shortage plaguing the sales numbers in our country. With minerals cadmium, rhodium playing a major role in chip manufacturing, the ongoing crisis is defeating the prospects of positive growth in the sector. Steel prices and other essential components used for manufacturing the vehicles, especially the four-wheeler segment has taken a major hit, with this crisis.

In terms of our growth in GDP, this crisis would not be playing many roles. Since some of our basic economic fundamentals still remain strong there is scope for our nation to rise back to positive trend-based growth. With high anticipation of growth figures of close to 9.2%, we would have to wait and watch how our country would progress by this year's end optimism is the key in this regard.