Russia-Ukraine war will hit trade and commerce in India: CAIT

The traders’ body - Confederation of All India Traders (CAIT) – has expressed serious concern about the ongoing war between Ukraine and Russia and said that it will impact very negatively for the Indian economy. The officer bearers of the CAIT said that after the pandemic and with the relaxation of restrictions, things were expected to improve, however, the military conflict between Russia and Ukraine has posed another challenge for the economy.

“The war between Russia and Ukraine is expected to hit badly the Indian economy and the trade to a significant extent jeopardising all efforts to recover the domestic trade from Covid pandemic. The expected rise in crude oil will be the crucial and critical factor which will force the prices to go upward whereas the expected rise in gold prices will also participate in a hike in the prices of the commodities,” CAIT said in a press statement.

It added, “On the other hand, during an inflated scenario, the Rupee is expected to become weak which will surely affect the balance of trade.

CAIT National President BC Bhartia and Secretary General Praveen Khandelwal analysed the current situation and said, “In the current year, India’s total oil imports increased to 25.8 per cent leading to continuous increase of oil prices. Crude oil and allied products share 9% of the wholesale price index. The hike in crude oil will lead to further inflation in petrol and diesel prices which will lead to overall inflation as the manufacturing and transportation cost of the goods will become more costly. The oil is heavily used in manufacturing, plastics, pharmaceuticals, machinery, paints and a lot of other commodities etc. as part of the raw material which will also contribute to inflating the prices.”

They added, “Beside crude oil, India imports pharmaceutical raw material, sunflower, organic chemical, plastics, iron and steel etc whereas India exports fruits, tea, coffee, pharmaceutical products, spices, oilseeds, machinery and machinery goods etc. On the other hand, Russia is the 25th largest partner in trade with India with exports to Russia at $ 2.5 billion dollars and imports from Russia stands at #6.9 billion dollars.”