North Atlantic Treaty Organization (NATO) chief Jens Stoltenberg’s dire warning that the West should prepare for the war in Ukraine to last years will certainly have added to the fears and concerns of policymakers across the globe. Countries, especially developing nations, are grappling with the consequences of Russia’s invasion of Ukraine, including a spike in prices of food, energy and fertilisers, as well as a shortage of these commodities. The most serious impact has been on energy, with the Economist
North Atlantic Treaty Organization (NATO) chief Jens Stoltenberg’s dire warning that the West should prepare for the war in Ukraine to last years will certainly have added to the fears and concerns of policymakers across the globe. Countries, especially developing nations, are grappling with the consequences of Russia’s invasion of Ukraine, including a spike in prices of food, energy and fertilisers, as well as a shortage of these commodities. The most serious impact has been on energy, with the Economist Intelligence Unit warning that crude prices will remain above $100 a barrel for as long as the conflict continues. Russia and Ukraine account for almost a third of global wheat and barley exports and the blockade of Ukrainian ports has resulted in short-ages in different parts of the world. Though the West has said the sanctions on Russia don’t affect food supplies, Russia has been contending the embargoes on its banking system and shipping industry have made food exports impossible.
New Delhi initially found itself in a tough spot because of its longstanding strategic ties with Moscow, which required a delicate balancing act between Russia and the West and led to India abstaining in all Ukraine-related votes at United Nations (UN) bodies and not criticising Russia’s actions. Despite immense pressure from the United States and its partners not to accelerate purchases of discounted Russian energy or to circumvent the sanctions regimes through alternative payment mechanisms, Indian refiners have been rapidly picking up Russian oil. So much so that Russia has gone from accounting for only about 2% of India’s oil imports till February to becoming the second-largest source of crude, after Iraq, between March and June.
India’s ability to withstand such pressures from the West — no doubt helped by the fact that key European powers such as France and Germany were still buying Russian gas — does not mean the country’s worries are over. In an interconnected world, the prolongation of the war does not augur well for any country. Higher global crude prices will inevitably lead to high inflation and increased interest rates, which a country struggling to overcome the devastating impacts of Covid-19 can do without. The continuation of the conflict in Ukraine will also put greater pressure on India’s new partnerships with the West, which have grown in importance in the past decade. With China emerging as the main political and strategic challenge in the region and the wider Indo-Pacific, India cannot afford to weaken such partnerships.
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