Russia Ukraine War UPSC: Relevance
- GS 2: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.
Russia Ukraine tension: Context
- The ongoing Russia Ukraine tensions have impacted the global trade significantly. The supply chains have been hit all around the world and experts are of the opinion that Indian economy will be negatively impacted due to such disruptions.
Impact of Russia Ukraine War on Indian Economy: Key sectors to be impacted
Crude oil
- Oi forms a major component of our import basket from Russia. The sanctions can sour the price to a new level, resulting into higher prices of petroleum products domestically.
- The rise in fuel prices could further aggravate the issue of inflation in the country.
- Notably, Economic Survey 2021-22 has pointed 3 challenges to Indian economy—Resurgent COVID waves, supply chain disruptions and inflation.
- Due to rise in fuel price our import bill will sour and so will our Current Account Deficit.
Exports
- If the fuel price remains at high levels for a long time, prices of other commodities which India imports will also rise in the international market.
- Due to this pressure on global economy, demand may be impacted which could affect our exports too.
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