With Russia-Ukraine At War, Here Are The Lessons For India

Long gone are when people in warring countries were the only battle victims. In current times, every country is interdependent to carry out its day-to-day activities. Therefore, the ongoing war between Russia and Ukraine inevitably affected the global supply chain in such a scenario. Ukraine is known as the world's wheat bowl, and the two countries together provide for almost a quarter of the global wheat supply. The wheat crop in Russia and Ukraine would mature in September and August; however, the prices have increased from ₹ 20,000 to ₹ 25,000 per tonne due to the war.

Opportunities Ahead Of India

However, even though geopolitical tensions in any world region are a matter of concern, India is likely to benefit from the war's economic spectrum. After supply chains from Russia and Ukraine got disrupted, the whole world turned towards India, the second-largest exporter of wheat, to plug in the deficit and keep the supplies running. Thus, India has an immense opportunity to scale up its wheat production and exports and reap the maximum economic benefit. India produces around 107.59 million tonnes of wheat annually, of which a significant chunk goes for domestic consumption.

The industry executives say India can quickly meet the short-term wheat supply challenges this year because of its surplus in store. Even though India has traditionally not been an active exporter of wheat, it has massively scaled up its non-basmati rice and wheat exports in the last two years.

On the global front, India's statement that it was closely monitoring the situation in Ukraine and its call for maintaining a balance between the United States and Russia and asking for a peaceful resolution is how India is balancing on the thin thread of balancing between the two superpowers. However, any diplomatic standing cannot counter the fact that India will inadvertently suffer the brunt of the tense situation. According to Dun & Bradstreet's report, "Businesses around the globe continue to grapple with inflation brought on by the pandemic as well as commodity price increases brought on by disruptions to the supply chain".

A Tightrope Diplomatic Stand At UNSC

Even though Ukraine and Russia urged India to take a clear stand on the global front, Delhi's first statement at the United Nations Security Council (UNSC) did not name any country. Still, it said that it called for peace in the international community. The Indian representatives stopped short of criticising Russia on the global forum. Before the UNSC voted on the draft resolution that condemned the Russian invasion of Ukrainian territory, Delhi faced calls from the US, Russia and Ukraine to 'do the right thing'.

Global crude oil prices are already at a 13-year-old high as the European and the Russian authorities explore to ban the Russian crude oil and tighten the snooze of sanctions on Moscow. The sanctions produce a significant risk to other economies globally, including India. The brent crude, an essential component of India's energy needs, surged at $139 per barrel, the highest rate since July 2008. The sharp rise in the oil price harmed the stock markets as the senses crashed by 1,500 points to a seven-month low. Moreover, it was the first time the rupee almost breached the 77 mark by closing at 76.97 rupees per dollar. Currently, the rupee is the worst-performing Asian currency.

The rising prices of commodities across the globe raise concerns for inflation and lower economic returns for the countries. Inflation has already been at a 40-year high as investors predict a long-lasting impact of the ongoing geopolitical tensions between the two countries. A similar economic situation had last occurred in the 1970s when a combination of lower economic growth and higher inflation, or stagflation, weighed on stock returns.

Lessons For India From Russia-Ukraine Crisis

However, the Russia Ukrainian conflict has been an eye-opener for the rest of the world and India. First and foremost, by now, India must have understood that nobody would come to help India in case military tensions get out of hand with our east neighbour China. A similar case is advantageous to India if Pakistan and our western neighbour start acting up, and the West is not likely to enter into war with China for India's sake. While a lot of international condemnation is expected, as is happening against Russia, nobody would provide military support or enter into war for another country's sake.

On similar lines, even though Russia has been a close ally of India for decades, the growing proximity between Moscow and Beijing is public. Therefore, any possibility of Russia playing the active role of a mediator between India and China is unlikely. Moreover, even though India has succeeded in a neutral global stand until now, it might not be able to continue this for long. US, Russia and China are amongst the most substantial powers, and even if India does not join a bloc, it would have to accept which country it was closer to.

After Prime Minister Modi came to power, his vision was a self-sufficient India. In dynamic times, India would reap benefits if it strives for 'Atmanirbharta'. India's wars of tomorrow would have to be fought with Indian equipment only. The Russia-Ukraine crisis has clearly shown the vulnerability of depending upon another nation for military equipment.

In the recent budget, the Narendra Modi government has created a massive scope in research and development for domestic manufacturers of defence goods by earmarking 68 per cent of the capital. The defence ministry has already rolled out new schemes for promoting research and has been careful about doing it independently and not through the Defence Research and Development Organisation (DRDO).

Modern warfare has more tech-friendly. Therefore, massive investments to boost technology in the country would be one of the essential steps, rather than re-inventing the old wheel.

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