From trade to diplomacy: What one year of Russia-Ukraine conflict meant for India | India News
India maintained a deft balance between the western powers and Russia as it charted its own path of neutrality throughout the conflict.
It also suffered the fiscal implications of the war, just like the rest of the world, with inflation staying above RBI’s tolerance band for most part of the year.
Meanwhile, Indian refiners managed to scoop up Russian oil at heavy discounts as the country’s import of Russian oil surged to an all-time high.
As the Russian invasion of Ukraine marks one year today, here’s a look at how it impacted India …
Geopolitical force
The role of India as a geopolitical force came to the fore time and again throughout Russia’s invasion of Ukraine over the last year.
Right at the outset, India clarified that it will maintain a neutral stance on the conflict — given its long-standing ties with Russia and a growing bonhomie with US.
So far, India has abstained from all resolutions on Ukraine passed at various UN bodies such as the General Assembly, Security Council, and Human Rights Council.
On Thursday too, India abstained in the UN General Assembly on a resolution that underscored the need to reach “comprehensive, just and lasting peace” in Ukraine, as it questioned whether the world was “anywhere near a possible solution” acceptable to both Moscow and Kyiv a year into the conflict.
But as New Delhi maintained a delicate balance and adopted a neutral approach towards the conflict, the western powers, including US, ackowledged India’s role as an important player who can — to an extent — influence the direction of the war.
Prime Minister Narendra Modi and his senior ministers actively advocated for a peaceful resolution to the conflict through talks.
In fact, over the last year, PM Modi had several talks with both Ukrainian President Volodomyr Zelenskyy and Russian President Vladimir Putin, wherein he pitched strongly for a resolution through dialogue.
At the Shanghai Cooperation Organization (SCO) summit at Samarkand in Uzbekistan last year, PM Modi told Putin that “today’s era is not an era of war.”
PM Modi’s message to Putin resonated deeply with the world and even made it to the G20 declaration released at the end of the two-day summit in Bali last year, when India was formally handed over the presidency of the prestigious group.
After four days of deadlock, India played a key role in helping forge a consensus on the draft G20 communique which reflected PM Modi’s call to Russia on cessation of hostilities.
By demonstrating deft diplomacy and advocating peace at key global forums, India crystalized its role as an effective interlocuter who can play a key role during the conflict.
Experts told Al Jazeera that New Delhi’s unique position as a friend of both Russia and the West could see it emerge as a key mediator.
That’s because India has shared very close ties with Russia over the last few decades with the country accounting for nearly half of its total defence imports.
Meanwhile, India has forged deeper geopolitical ties with US to offset China’s growing assertiveness in the region.
In the last few years, India has expanded its security ties with America through groups like Quad and a number of defence treaties.
On Friday, US secretary of state Antony Blinken said that countries like India were likely on a trajectory away from alignment with Moscow but that process would not happen “in one fell swoop.”
There are countries that have long-standing, decades-long relationships with Russia, with the Soviet Union before, that are challenging to break off in one fell swoop. It’s not flipping a light switch, it’s moving an aircraft carrier
Antony Blinken
French President Emmanuel Macron acknowledged India’s unique position as a regional power in his recent remarks.
Earlier this month, Macron reiterated that India under Prime Minister Narendra Modi’s leadership can mobilise the world to address the “tremendous issue” of Russian aggression against Ukraine.
G20 presidency
India’s G20 presidency also comes at a critical time with both the West and Russia looking at New Delhi to strengthen world stability and security.
It is, therefore, quite symbolic that the Centre chose “Vasudhaiva Kutumbakam” (the world is one family) as the theme of India’s G20 presidency with a focus on finding pragmatic global solutions for the well-being of all.
Prime Minister Narendra Modi had earlier hinted that Russia’s war in Ukraine is one of crises that will face the G20 as India takes over the presidency.
The world remains “trapped in the same zero-sum mindset,” Modi wrote in an editorial in The Times of India. “We see it when countries fight over territory or resources. We see it when supplies of essential goods are weaponized.”
The comment underscored New Delhi’s balancing act — especially when it comes to Vladimir Putin’s war.
“Our G20 priorities will be shaped in consultation with not just our G20 partners, but also our fellow-travelers in the global South, whose voice often goes unheard,” Modi wrote.
Now, with G20 meetings kicking off in India, it would be important to see how the government plays the delicate role of trying to establish a consensus among global powers.
Economic impact
One of the major impacts of the war was a slowdown in pace of economic growth, at a time when they were gradually looking to rise above the pandemic distress.
Disruption to two major trade routes, Russia and Ukraine, along with subsequent sanctions imposed on Russia by different economies, had a major impact on global supply chains. As a result, oil prices surged to record highs, which in turn pushed up inflation.
However, the Indian economy showed extreme resilience to such external factors and expanded by 13.5% in the first quarter of the financial year 2022-23 (April-June 2022). For the next quarter, that is, July-September 2022 GDP growth came in at 6.5%.
Thus, India found itself in a better position compared to other global economies. Both World Bank and International Monetary Fund (IMF) have termed it to be a relatively “bright spot”.
Even though India’s pace of growth is projected to slowdown in the coming financial year, it is still being touted as the fastest among major economies.
A few days back, IMF managing director Kristalina Georgieva said India alone will contribute 15% of the global growth in 2023.
“Why is India a bright spot? Because one, the country has done really well to turn the digitalization that has been already moving quite well into a major driver of overcoming the impact of the pandemic and creating opportunities for growth and jobs,” the Managing Director noted.
“Second, because India’s fiscal policy has been responsive to economic conditions. We have seen the new budget presented, and it signals the commitment to fiscal consolidation, while at the same time provides significant financing for capital investments. And three, because India didn’t shy away to learn the lessons from the pandemic and to implement very strong policies to overcome what has been really a difficult time for a number of months,” she said.
However, despite steering a healthy growth, the common man in India was stung by inflation with India, like the rest of the world, struggling to contain domestic prices of key commodities.
Fueled by erratic rainfall and supply shocks from Russia’s invasion of Ukraine, prices of daily consumables like cereals and vegetables which form the largest category in the inflation basket have climbed even further since February 2022.
In April 2022, two months after Russia’s invasion of Ukraine, India’s retail inflation jumped to 8-year high of 7.79% and remained above the Reserve Bank of India’s (RBI) tolerance band of 2-6%. This was mainly fuelled by the massive surge in global crude oil prices that went past $139 a barrel, because of supply chain disruptions and multiple sanctions on Russia.
Inflation spiked yet again in January 2023 to 6.52%, after staying within 6% for 3 months, on higher food prices.
According to latest MPC minutes published on Wednesday, the RBI said price pressures in India remain high and it would be premature to lower the guard on inflation.
Cheap Russian oil
During the war, India has vastly increased its purchases of cheaper Russian oil.
As the West responded with sanctions followed by a price cap and a ban on importing Russian crude, Indian refiners started lapping up the shunned barrels at discounts.
India meets more than 85% of its oil demand via imports, which makes it highly vulnerable to price volatility. The state-owned refiners, who have been prevented by the government from raising pump prices of diesel and gasoline since May, have increasingly favored cheaper Russian imports.
Despite several countries calling out India for ramping up oil imports from Russia, the Centre has staunchly defended the move, calling it a part of “inflation management”.
Meanwhile, Union ministers like S Jaishankar and Nirmala Sitharaman have also hit back at European countries for targeting India even as they continue to depend heavily on Russian gas.
Nevertheless, the discounted Russian oil due to the raging conflict resulted in massive gains for Indian refiners.
Last month, India’s Russian oil imports increased to a record 1.4 million barrels per day (bpd), up 9.2% from December. The share of Russian crude rose to a record 28% of India’s oil imports in January, with Russia remaining the top supplier followed by Iraq and Saudi Arabia.
