Rohit Ahuja
Head – Research & Outreach, ICRA Ltd
Rohit Ahuja
Head – Research & Outreach, ICRA Ltd
Moderate short-term commodity price risk on domestic economy from Russian-Ukraine conflict
Limited commodity price risks are expected on the India from the Russian-Ukraine conflict, however, the impact remains to be seen if the war escalates and prolongs. In the initial period, commodity price risk pertains to rise in prices of oil & gas which have already crossed $ 115/bbl. The positives are strong forex reserves and a current account deficit below 3% of GDP, besides the rupee depreciation is unlikely beyond 78/US$ in H1 CY2022. Also import trade with Russia is not significant. In terms of sectoral impact, upstream oil & gas, ferrous and non-ferrous metals stand to gain from all-time high commodity prices, whereas there could be negative implications for sectors where oil/gas is a primary input such as chemicals, gas utilities, refining & marketing, etc.