The war between Russia and Ukraine is expected to hit badly the Indian economy and the trade to a significant extent jeopardising all efforts to recover the domestic trade from covid pandemic. The expected rise in crude oil will be the crucial and critical factor which will force the prices to go upward whereas the expected rise in gold prices will also participate in a hike in the prices of the commodities. On the other hand, during an inflated scenario, the Rupee is expected to become weak which will surely affect the balance of trade-said the Confederation of All India Traders (CAIT).
CAIT National President B.C.Bhartia and Secretary General Praveen Khandelwal while analysing the current situation arising out of war between Russia and Ukraine said that in the current year, Indiaâ€™s total oil imports increased to 25.8 percent leading to continuous increase of oil prices. Crude oil and allied products share 9% of the wholesale price index. The hike in crude oil will lead to further inflation in petrol and diesel prices which will lead to overall inflation as the manufacturing and transportation cost of the goods will become more costly. The oil is heavily used in manufacturing, plastics, pharmaceuticals, machinery, paints and a lot of other commodities etc. as part of the raw material which will also contribute to inflating the prices.
Beside crude oil, India imports pharmaceutical raw material, sunflower, organic chemical, plastics, iron and steel etc whereas India exports fruits, tea, coffee, pharmaceutical products, spices, oilseeds, machinery and machinery goods etc. On the other hand, Russia is the 25th largest partner in trade with India with exports to Russia at $ 2.5 billion dollars and imports from Russia stands at #6.9 billion dollars.
Bhartia and Khandelwal said that as a part of normal business traders in India pay advance to Ukraine suppliers which are expected to be stuck for an unknown period.There must be shipments in transit which have been stuck and will certainly accrue losses to Indian traders. The expected rise in dollar prices will adversely hit the trade with other nations as the Indian traders will be forced to pay the prevailing price at the time of shipment.The hike in gold prices will further affect the domestic market. The overall trade of India is expected to be unstable in future time.
The trading community of the Country stands in solidarity with the Government during the current crisis and will support any move that the Government takes to maintain financial stability in the Country. The CAIT has urged the Union Government to announce some supportive measures for the trade and commerce in the Country while keeping a check on the current war between Russia and Ukraine-said Bhartia and Khandelwal