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Ground Report | New Delhi: Russia-Ukraine war affect India; Russia on Thursday launched a sweeping attack on Ukraine, hitting cities and bases with aerial bombardment or artillery strikes, as civilians fled in trains and cars. Ukraine's government said Russian tanks and troops crossed the border in a "full-scale war" that could rewrite the geopolitical order, with consequences being felt around the world.
Initiating the largest-scale Moscow aggression since the Soviet invasion of Afghanistan in 1979, Russian President Vladimir Putin announced a major military operation in a speech that downplayed international sanctions and condemnation and made a grim allusion to the arsenal nuclear power of their country by threatening "consequences they have never seen" to any foreign country that tried to interfere.
Sirens and huge explosions were heard in the Ukrainian capital and other cities, as people filled train stations and highways. The government of the former Soviet republic reported an anticipated invasion from the east, north and south, reporting more than 160 dead and dozens wounded.
The NATO chief said the "brutal act of war" had broken peace on the European continent, as the US-led alliance moved more troops into eastern Europe. The conflict was already rattling global financial markets, with stocks plummeting and oil prices soaring amid concerns that heating bills and food prices would soar.
World markets plunged and crude oil prices soared nearly $8 a barrel. Stock market benchmarks fell in Europe and Asia and US futures tumbled. Brent oil rose above $100 a barrel on Thursday, on fears of possible disruptions to Russian supplies. The ruble sank.
Anticipating international condemnation and countermeasures, Putin warned other countries not to intervene. "Whoever tries to stop us, or simply creates threats to our country and its people, must know that the Russian response will be immediate and will lead to consequences that they have never seen in history." (Russia-Ukraine war affect India)
The situation in eastern Ukraine is in danger of becoming a major crisis, TS Tirumurti, India's ambassador to the United Nations, told the UN Security Council meeting on Thursday. The legitimate security interests of all parties must be fully taken into account, he said.
However, a rise in crude oil prices and the prospect of a recession in Europe in the event of a war in Ukraine and tougher sanctions against Russia do not bode well for the Indian economy, ICICI Securities said in a recent research report.
India is a large importer of crude oil. As such, the first point of impact of higher oil prices is the current account. The rise in crude prices comes at a time when the current account deficit has already widened. However, India today has much greater protection against any volatility in its balance of payments than in the past.
To Russia, Ukraine and other Eastern European countries, goods move from the Suez Canal and the Black Sea, FIEO director general Ajay Sahai said. He added that the amount of impact on trade will depend on the duration of the war.
“This is a major setback for the trade as it was recovering from the COVID-19 pandemic. Exporters are cautious in dealing with their trade-in in that region. The war will affect both the movement of goods, payments and oil prices,” Sahai said. Bilateral trade between India and Russia stood at $9.4 billion so far in the fiscal year, up from $8.1 billion in 2020-21.
India's main imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical appliances; machinery and electrical equipment and fertilizers. While India's main export items to Russia include pharmaceuticals, electrical machinery and equipment, organic chemicals, and vehicles.
India's bilateral trade with Ukraine stood at $2.3 billion so far this fiscal year, up from $2.5 billion in the last fiscal year. The main Indian import items from Ukraine are agricultural products, metallurgical products, plastics and polymers, etc., while pharmaceuticals, machinery, chemicals, foodstuffs, etc., are the main Indian exports to Ukraine.
FIEO Vice President Khalid Khan said that if the military operations continue for a long time, it will have serious implications for exports and imports from that region. “Oil and gas prices will skyrocket, there could be payment delays for traders,” he said.
Plastics Export Promotion Council of India (PLEXCONCIL) Chairman Arvind Goenka said India's plastics exports to Ukraine and Russia are in the range of just $100-120 million annually, but imports of plastics are much higher.
FIEO President A Sakthivel said the US sanctions on Russia have added to the uncertainty for exporters. “We advise exporters to wait and watch while the exact implication of banking and financial sanctions must be assessed,” he added.
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