The war between Russia and Ukraine has not only exacerbated the crisis in Europe, but affected India a lot too. Nobody knows how long the “special military operation” authored by Russian President Vladimir Putin will continue, but it goes without saying that we will have to bear the brunt of this war for a long time. The globally renowned Japanese company Nomura Holdings has authored a report documenting the likely spin off from the raging war between Russia and Ukraine. It specially mentions that India is among the countries which are going to be the worst affected by this war. Prima facie, there is a grain of truth in it.
Before discussing the fallout of war on India, it is important to know that the conflict between NATO countries and Russia is not going to end in near future. Russia will not stop until the expansion of NATO is stopped. In fact, in order to crack down on the Soviet Union, the US and the European countries established NATO (North Atlantic Treaty Organisation) in 1949. When Soviet Russia disintegrated in 1991, a total of 15 new countries came into existence and Russia was the foremost among them. With a view to marginalise Russia, NATO, led by the US, tempted the countries splintered off the Soviet Union to join NATO. Countries like Latvia, Estonia and Lithuania joined NATO. Even countries such as Bulgaria, Romania and Slovakia, which were allies of the Soviet Union, also became part of NATO. Meanwhile, Putin continued to grind his teeth helplessly to see these countries join NATO one by one but he also continued to increase Russia’s strength. When Ukraine also opted for NATO membership, it lost its patience and ordered a special military operation which is but an euphemism for a war and invasion of Ukraine. Russia has the US and NATO to their knees. Ukraine was left isolated.
It’s anybody’s guess what effect this is going to have on us. The erstwhile Soviet Union has been replaced by Russia which has always been our closest ally. It is due to the assistance and cooperation of Russia that we have emerged among top military powers in the comity of nations. But in recent years, our proximity with the US has increased and it will not be easy for India to keep both Russia and the US happy in the present situation. For the time being, India has acted very patiently. It neither supported Russia nor Ukraine. When a journalist asked Joe Biden at his press briefing last week whether India and the US, which are major defence partners, share the same viewpoint on Russian aggression, Biden just stated that the US will talk to India. However, there has been no solution so far. Well, it seems that India will maintain its neutrality at any cost because India has faith in the Panchsheel doctrine. So the question is, will India be affected by the sanctions imposed by the US and other countries of the world on Russia? We still import about 65 to 70 per cent of the defence equipment from Russia. Russia has also given us the first consignment of S-400 air defense system to keep the pressure on China and there has also been an agreement to make the sophisticated rifles in India itself. But we must not forget that our proximity with the US has brought Russia closer to China and also resulted in Russia conducting joint military exercise with Pakistan. However, considering the current geopolitical situation, India needs Russia more than the US. Since India and Russia trade in rupees, there will be no problem in continuing the trade relations unabated. So will the US vent its anger on India too? Well, it does not seem possible because the US has been silent about India in the matter of sanctions already imposed on Russia. In case of S-400, it had imposed sanctions on Turkey but did not say anything to India. The US’ problem is that it needs India’s support to crack down on China. That’s why I feel that there will be some problems at the level of diplomacy but India will manage it.
The major challenge before India will be to control inflation because we not only have trade relations with Russia, we also export to and import a lot of things from Ukraine. Last year, India exported products worth Rs 19,649 crore to Russia and imported goods worth Rs 40,632 crore from it. Likewise, India exported goods worth Rs 3,338 crore to Ukraine and imported goods worth Rs 15,865 crore from it. Apart from petroleum products, we import raw materials for medicines, sunflower oil, organic chemicals, plastics, iron, steel, among other things, from Ukraine. It is but natural that the war will affect the business. The biggest impact will be caused due to the huge jump in the prices of petroleum products. India imports 85 per cent of its petroleum products. Petroleum prices have also crossed $100 per barrel in the international market. There are elections in many states of India and the government is not taking the risk of increasing the prices of petrol. But as soon as the elections are over next month, the prices of petrol and diesel are bound to go up.
Recently, I read a report that even if there is an increase of 10 per cent in the prices of petroleum products, our GDP will fall by about 0.2 per cent. Besides, India’s economy will be badly affected due to the rise in dollar prices. The situation will not augur well for the already constricted economic system and its ill-effect will be directly felt on our development. To put it in layman’s language, when the prices of the dollar and petrol and diesel go up, inflation follows the same trajectory. This will affect the bread and butter of the common man. Business will also be hit with our small and medium industries bearing the brunt of inflation. Strange that they are waging a war and we will have to bear the consequences! The only question that comes to my mind is why this war was started? Be it Ukraine or Russia, wherever innocent lives are lost, we Indians are deeply pained because we believe in the Panchsheel doctrine that emphasises peaceful coexistence. Here I would also like to laud the initiative taken by Prime Minister Narendra Modi in safely evacuating the Indian citizens stranded in the war-torn Ukraine. It shows the sensitivity of India towards its citizens.
Once again, I would ask the same question as to why this world does not want to live with peace and harmony?
The author is the chairman, Editorial Board of Lokmat Media and former member of Rajya Sabha.
As a matter of fact, Russia’s quarrel is with NATO countries and the US, but Ukraine has been made a sacrificial goat. The war will come to an end but many problems have popped up for India and its repercussions will continue for a long time to come. There will not only be serious diplomatic problems, but we will also be directly hit by inflation.