How will a Russian invasion of Ukraine impact India?

India and Russia are committed to strengthening ties, with joint research and military trade a major part of it

With a Russian invasion of Ukraine looking increasingly possible by the day—compounded by lack of progress in talks between the US and Russia—markets have been tumbling and oil prices surging amid the uncertainty.

Countries, anticipating an escalation in the situation, have been taking counter measures. Even as India is yet to take a stance on the issue, it will be expected to feel the repercussions of the same. The possible effects of a Russian invasion of Ukraine were highlighted in a report by the Hindustan Times.

Crude petroleum

A main effect of the invasion will be felt in the prices of crude petroleum, which are already hitting a high note. Crude prices have been at Rs 6,750.58 ($90) per barrel for over a week at present, even as the Economic Survey projected pricing of Rs 5,250.45- 5,625.49 ($70-75) per barrel.

“Both benchmarks (for petroleum prices) hit their highest since September 2014 on Monday (February 14), with Brent touching Rs 7259.13 ($96.78) and WTI reaching Rs 7,187.12 ($95.82),” Reuters reported.

“Oil prices steadied on Wednesday (February 16) after retreating more than three per cent in the previous session as investors gauged the impact of easing Russia-Ukraine tension against a taut balance between tight global supplies and recovering fuel demand,” it stated.

Also Read — US hopes for India's support if Russia attacks Ukraine

Even as crude prices are expected to be higher, a military conflict could escalate the crisis, as Russia has a share of around 13 per cent in global crude oil production, which is almost half the total of the OPEC (Organisation of Petroleum Exporting Countries).

Prices of natural gas are also expected to see a sharp spike in case of an invasion as, Russia, according to Reuters, accounts for almost 40 per cent of the global supplies.

Effect on trade

In case of an invasion, the US has warned of severe sanctions on Russia, which may also subsequently follow for any countries that trade with the 'aggressor'.

A conflict could hinder India's plans to strengthen ties with Russia, following meetings between ministers and the country heads towards the end of 2021, when Vladimir Putin visited India to meet Prime Minister Narendra Modi.

Russian imports accounted for 1.4 per cent of India's total in the last fiscal (2020-21). “Enhancing trade and economic cooperation between India and Russia is a key priority for the political leadership of both the countries as is clear by the revised targets of increasing bilateral investment to Rs 3.75 lakh crore ($50 billion) and bilateral trade to Rs 2.25 lakh crore ($30 billion) by 2025,” stated a section on India-Russia economic relations on the website of the Indian embassy in Russia.

Arms, military equipment

Russia has been among the largest global arms exporter in the world. However, the problem is compounded by the fact that India has been the recipient of the highest proportion of its exports, according to a March 2021 factsheet released by the Stockholm International Peace Research Institute (SIPRI).

Also Read — India is eager for Putin’s weapons despite US sanctions risk

According to the factsheet, “The overall decrease in Russia’s arms exports between 2011–15 and 2016–20 was almost entirely attributable to a 53% drop in its arms exports to India… Although several large Russian arms deals with India, including for combat aircraft, were completed by 2020, India placed new orders for a variety of Russian arms in 2019–20. The ensuing deliveries will probably lead to an increase in Russian arms exports in the coming five years.”

According to the website of the Indian Embassy in Moscow, "Over the years, (India-Russia) cooperation in the military-technical sphere has evolved from a purely buyer-seller relationship to joint research, design development and production of state of the art military platforms. Production of the Brahmos cruise missile is an example of this trend. The two countries are also engaged in joint design and development of the Fifth Generation Fighter Aircraft and Multi-Role Transport Aircraft.”

Even as India has been strengthening its ties with other countries, including those in the Quadrilateral Security Dialogue (better known as Quad), replacing Russian imports straightaway might be an issue due to the existing advanced relation with Russia.

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