Russia-Ukraine & Israel-Hamas conflicts: A fallout on India is inevitable but tailor-made policy measures

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Key Points

In the case of Russia, Indias total exports have been hovering around $3 billion in the last few years whereas its imports went from $5.5 billion in 2020-21 to $46.2 billion, a 740% increase in just two years, driven mainly by Indias aggressive buying of crude oil being offered at a cheaper rate...

In micro terms, Russia-Ukraine war has resulted in select benefits for Indiafor example robust wheat exports (till it was banned in May last year) and then in crude oil imports from Russia at a discounted price, says Ajay Dua, former Union industry secretary..

According to Ranen Banerjee, partner and leader Economic Advisory Services, PwC India , the very fact that commodity prices have been soft and crude oil prices have moderated after the initial spike implies that the market is expecting the Israel-Hamas conflict to not escalate and disrupt oil supplies..

The demandside weakness emerging from economic headwinds across Europe and China is keeping oil prices in check, says Banerjee, adding that the inflation impact owing to global oil price fluctuations has been contained in India, as the pump prices of fuel have not changed for months...

Last fiscal year, India imported Russian oil worth $31 billion, up from $2.4 billion the previous year, registering a 1,200% increase.. Pradeep Mehta, secretary-general of CUTS International, a public policy research, advocacy and networking NGO, says that no single event, either Russia-Ukraine or Israel-Hamas war, can determine Indias economic trajectory, provided New Delhis responses to f luctuations are well thought-out..

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