Russia – Ukraine War Impact On India: War between Russia and Ukraine (Russia – Ukraine War) 100 days have been completed. And in the last 100 days, its massive impact has been seen on the whole world including India. Due to this war, the prices of all commodities including crude oil caught fire. So the prices of Sunflower Oil, including Wheat, started to skyrocket due to disruption in Ukraine’s supply. The government banned the export of wheat. Due to which there is a continuous increase in inflation in the country. Due to the increase in inflation, the RBI had to intervene and as a result, the loan became expensive when the RBI increased the repo rate. The EMI of people who have taken home loan has become expensive. The rise in inflation is affecting the demand. So upheaval is also being seen in the stock market. Foreign investors have sold records in the market during this period, due to which lakhs of crores of investors have been destroyed. Let’s take a look at what is the impact of the Russia-Ukraine war on India.
rise in inflation
The war of Russia Ukraine has done the work of robbing the pockets of the people of India. From food items to fuel, natural gas, steel, aluminum, many things have become expensive. The rise in retail inflation is proof of this. Where the retail inflation rate was 6.01 percent in January, it has increased to 7.79 percent in April. Food inflation has also increased due to the rise in the prices of wheat, flour, edible oil, which stood at 8.38 percent in April 2022. Whereas in January 2022 it was 5.43 percent.
5.38 percent decrease in foreign exchange reserves
Since the fall in the rupee against the dollar, there is a continuous decrease in the Foreign Currency Reserves of India. Since the rupee weakened against the dollar after the Russia-Ukraine war, foreign investors of the country are continuously withdrawing money and investing in less risky places. The Reserve Bank of India has tried to stop the rupee, despite this, on Tuesday, the rupee had fallen to Rs 77.77 against the dollar. RBI has said in its State of Economy report that in March 2022, $ 20 billion has been sold from its Monetary Fund to prevent further weakening of the rupee. RBI has said in its State of Economy report that as of May 20, India has foreign exchange reserves of $ 598 billion, from which only the estimated imports of the next 10 months can be met. Before the start of the war, India had a foreign exchange fund of $ 632 billion. After the war, there is only a decline in the foreign exchange reserves. Foreign exchange funds have decreased by $36 billion since Russia invaded Ukraine.
Rupee battered against dollar
Since the war between Russia and Ukraine started, the rupee is depreciating against the dollar. The rupee has also closed its all-time low of 77.72 against the dollar due to foreign investors withdrawing their investments due to global volatility. Before the war started on February 23, 2022, the rupee was at Rs 74.62 per dollar against the dollar, which has come down to Rs 77.56 on June 2, 2022. RBI has taken many new steps to stop the fall in rupee. RBI has sold dollars. But foreign investors are continuously selling investments in the Indian stock market and withdrawing investments, due to which the rupee is becoming weaker against the dollar. So far in 2022, foreign investors have withdrawn Rs 1.57 lakh crore from the Indian markets. If the rupee is not held, then due to the fall in the rupee, inflation may hit the people further, imports may be expensive, in such a situation the companies will put the burden directly on the common people. According to many experts, the rupee may weaken against a dollar and fall to 80 rupees per dollar in the coming days.
GDP lower than expected due to war
GDP has been 8.7 percent in the financial year 2021-22. However, in the first estimate released by the Statistics Department in January 2022, it was estimated to be 9.2 percent of GDP. Later in February, the Statistics Department had projected the GDP to be 8.9 percent in the second estimate. But in the figures of GDP for 2021-22 which have come on 31 May 2022, the GDP in the financial year has been 8.7 percent less than the estimate. Actually the main reason for this is the Russia-Ukraine war. Commodity prices skyrocketed due to the war. Petrol diesel became expensive. Inflation increased due to which demand decreased and due to this the GDP has been less than the estimate.
crude oil on the sky
After the war, the price of crude oil caught fire. The price of crude oil reached $ 139 per barrel, which was the highest since 2008. After the assembly elections, state-owned oil companies increased the price of petrol and diesel by Rs 10. But to give relief to the inflation-stricken public, the government reduced the excise duty on petrol by Rs.8 and on diesel by Rs.6. Due to this the prices of petrol and diesel came down. But now the government oil companies are incurring huge losses for selling petrol and diesel.
read this also
Insurance Companies Stock: From GIC to LIC, know how the investors of shares of government insurance companies are suffering huge losses?
Indian Aviation Market: Before the war broke out in the skies, know what Indigo gave to Rakesh Jhunjhunwala’s airline Akasa Air!