Indian Economy Will Suffer Immensely If There Is War In Ukraine
By A Special Correspondent
First publised on 2022-02-23 03:57:31
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With the Russian Federation Council (FC) giving a nod to President Putin's demand for use of force outside Russia, the final step in the possible invasion of Ukraine has got the seal of approval from the country's lawmakers. Earlier, Russia had recognized the independence of two western provinces in Ukraine that are held by separatists and approved sending of troops there. Although Russia had claimed that troops were being sent back to the barracks after a series of "military drills" on the Ukraine border, the latest move in the FC has confirmed that the matter is not so simple. It has also confirmed Western and NATO fears that an invasion is imminent.
India, along with the rest of the world, is worried that if Russia does attack, it will lead to a period of financial instability. Already, oil prices are skyrocketing, gold is seeking higher levels and stock markets are nose diving. Finance Minister Nirmala Sitharaman said the government was keeping a watch on the global headwinds and will intervene at the right time. Since India is already grappling with rising inflation, a war in Ukraine at this juncture will be disastrous for the economy. As oil prices have risen in the last few weeks but there was a freeze in India due to elections in five states, it is expected that pump prices will be scaled up by Rs 7 per litre after these elections end. With global prices set to rise further, fuel prices in India will rise further in March. This will lead to inflationary pressures and put the common man to a lot of hardship.
Further, investor wealth will also be eroded as stock markets are likely to crash as foreign funds will become net sellers. Investors will move to safer options like gold. If war happens, the Indian economy, which is showing signs of recovery, will suffer.
