All you need to know about Russia-Ukraine crisis’ impact on Indian kitchens, pharma sector, crude oil prices and more

• The Russia-Ukraine crisis is expected to have a notable impact on the Indian economy.
  
• Russia and Ukraine account for 90% of India’s sunflower oil imports.
  
• Crude oil, pharmaceutical sector and LNG industry is also expected to be impacted.
  

The Russia-Ukraine crisis refuses to simmer down – in fact, major countries have already declared it as a Russian invasion into Ukraine. Although India is far removed from the geographic location of the crisis, the tensions still have the potential of a major impact on the Indian economy.

In a globally connected world, geopolitical developments such as this have the potential to impact countries not directly involved in the conflict.

Russia-Ukraine crisis a headache for Indian households

As far as India is concerned, the Russia-Ukraine crisis could prove to be a major headache for Indian households as well as the policymakers.

As things stand today, Ukraine and Russia together account for 90% of India’s sunflower oil imports. Sunflower oil is one of the most popular edible oils consumed in India, alongside palm, soya and other alternatives. In fact, sunflower oil is the second most imported edible oil, next to only palm oil.

In 2021, India imported 1.89 million tonnes of sunflower oil – 70% of this was from Ukraine alone. Russia accounted for 20% and the balance 10% was from Argentina.

"India imports about two lakh tonne per month of sunflower seed oil and at times it goes up to three lakh tonnes per month. India is dependent on edible oil imports to the tune of about 60%. Any global development will have an impact," Sudhakar Desai, President, Indian Vegetable Oil Producers' Association told IANS.

While Ukraine produces about 17 million tonnes of sunflower seeds a year, Russia produces around 15.5 million tonnes of seeds. Argentina is far behind the two countries and produces around 3.5 million tonnes of sunflower seeds.

Amid the tensions with Russia, Ukraine has reportedly not sent a single shipment of sunflower oil in February. The usual shipment from Ukraine in the February-March period is between 1.5 to 2 million tonnes of sunflower seeds and if the ongoing conflict continues for two or three weeks, it will put pressure on the Indian market.

"If the Russia-Ukraine trouble continues for two/three more weeks, then there will be pressure on the Indian market as the oil stock will not get replenished,” added Desai.

Gas prices could also burn your pockets

India fulfills over half of its gas needs with imports of liquified natural gas (LNG) from Ukraine. A small part of India’s LNG consumption is also met through imports from Russia.

Pharma sector may face the brunt too

India’s main exports to Ukraine include pharmaceutical products. India is the third largest exporter of pharmaceutical products to Ukraine after Germany and France.

Companies like Ranbaxy, Sun Group and Dr Reddy’s Laboratories have representative offices in Ukraine and representatives from pharmaceutical companies have also set up an Indian Pharmaceutical Manufacturers’ Association (IPMA) in Ukraine.

Crude oil prices could surge further

Crude oil has also faced the brunt of the Russia-Ukraine crisis as the prices have surged to nearly $100 per barrel in the international markets, a over 4% increase.

The prices of petrol and diesel have remained unchanged in India since the government cut the excise duty on November 4. Since then, the prices of crude oil have increased by $10.

While the ongoing elections may be the reason for the price freeze, there could be a revision once the polls end on March 7.

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