Recently the hot news of Russia's invasion of Ukraine carries the biggest risk for the economy of the world and that too has not been completely recovered from the pandemic effect.
Coming to the backdrop of the conflict, it's been Russia who started the war. This Russian force carried out airstrikes, taking over the military bases and advancing toward Kyiv as civilians fled. The assault has followed weeks of tensions that have sent tremors through the world economy by ratcheting up every price.
Now about the Indian economy. Ukraine alone accounts for 70% of India's sunflower oil imports. The fall of 4.8% oil prices breached $100 a barrel since 2014. This is one of the biggest macroeconomic crises. Higher oil prices aggravate India's inflation as the current account widens and will put pressure on the rupee. For example, a 10% increase in crude oil prices will effectively increase India's current account deficit by $ 15 billion or 4% of GDP which will gradually lead to a depreciation in the domestic currency. The double-way trade between India and Ukraine was approximately $3.1 billion in the year 2021. India’s exports to Ukraine are about $510 million, with pharma products up 32% of it. Other exports include telecom instruments, iron, and steel, agrochemicals, coffee, etc. The rise in the price of sunflower oil where India meets 60% of it through imports. The bilateral trade for India and Russia is approximately $11.9 billion in the last year. India exported about $3.3 billion worth of goods and once again pharmaceutical products were the largest export commodity at $542 million. So this war can lead to several economic suffering for India and its economy.