The supply-chain crisis because of the Russia-Ukraine war will prompt a huge rise in inflation over 6 to 8 months. The proceeding with struggle is relied upon to have further unfriendly impacts on financial development and expansion. The yearly expansion rate took off to 6.01% in January 2022, a 7-month high. This is outside the Reserve Bank of India’s (RBI) inflation-targeting band and a lot higher than its expectations for 2022-23.
The geopolitical developments in Europe and the sanctions on Russia probably won’t allow inflationary tensions to retreat for the time being. The issue is that India’s economy is likewise battling with demand problems. Any utilization of deflationary policies will additionally hurt total interest and undermine recuperation.
Some sectors that stand to profit from this Russia-Ukraine crisis are the Indian large-cap IT industry, financials, capital goods, and the Indian agriculture sector. The Indian IT sector could turn into an option for organizations leaving the Ukrainian and Eastern European markets. Another sector that would be resilient against this crisis is the Indian agriculture sector, which has an adequate number of stocks right now to support the growth momentum, even as supplies from Russia get disrupted.
India has up to this point held a diplomatically neutral position on the Russia-Ukraine crisis, and with justifiable cause. Russia is a strategic economic partner, with key interests in India’s civil nuclear energy sector and defence. The governments of the two nations plan to increase bilateral investment and trade by $50 billion and $30 billion, respectively, by 2025.