From oil prices to pharmaceuticals: How Russia-Ukraine conflict affecting pockets of common man in India

Updated: Mar 07, 2022, 09:46 PM(IST)

The economic impact of the Russia-Ukraine conflict is massive with countries around the world are reeling with disrupted supply chains. Here's how the crisis has affected pockets of the common man in India. (A report based on data available till March 7)

Oil prices

On Monday (March 7), oil prices soared to their highest since 2008, after the US and European allies explored a Russian oil import ban, while delays in the potential return of Iranian crude to global markets increased supply fears. 

India imports over two-thirds of its oil requirements, and higher prices push up the country's trade and current account deficit while also hurting the rupee and fuelling imported inflation. 

Mayuresh Joshi, head of equity research at William O'Neil & Co, India, "Perception that a lot of foreign investors will have is emerging markets like India carry an additional risk factor in terms of all these macro-dynamics playing out and, as a safety measure, there is a move towards the dollar." 


Indian rupees

The Indian rupee fell to a record low at 76.97 against the dollar on March 7, settling 1.05% weaker at 76.96. 

The benchmark 10-year bond yield rose to 6.891% from the previous close of 6.813%. 


Steel price

Steel and aluminium (Russia contribute 6% of global primary aluminium production) prices, which had shot up in recent times from their already-high levels, will have an upward bias. 

While this would benefit domestic primary steelmakers and aluminium smelters because their realizations will rise, it would cascade negatively for the construction, real estate and automobile sectors. 



India, the pharmaceuticals sector may see only a marginal impact as its exports to Russia and Ukraine are currently exempt from sanctions, and the exposure of Indian drug makers to these geographies is low at 3 per cent of their total exports, Crisil said. 


Sunflower oil

Trade and banking-linked sanctions can also impact sectors sourcing key raw materials such as crude sunflower oil and rough diamonds. 

Nearly 10 per cent of India's edible oil consumption is sunflower based, of which 90 per cent is imported from Russia and Ukraine. 

An extended war could disrupt supplies to domestic oil mills, which typically carry an inventory of 30-45 days and have limited options to change their sourcing at short notice.


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