Flights Of Fantasy
[M Panging Pao]
The Russo-Ukraine war has entered the second week of intense fighting with Russian forces assaulting many Ukrainian towns and cities. Questions like ‘What will be the outcome?’ and ‘Will this war lead to World War III?’ are still being asked and remain unanswered.
It was also revealed that over 18,000 Indian students, including many from Arunachal and the Northeast pursue further studies (mostly medicine) in Ukraine. The government has launched ‘Operation Ganga’ to evacuate all Indians from Ukraine. As on last count, about 11,000 students, including six Arunachali students, have been evacuated, but still another 5-6,000 are left. A question emerges as to why so many Indian students are studying medicine in a country like Ukraine.
What would be the short-term and long-term impacts of the Russia-Ukraine war on India? Russia is the third largest exporter of crude oil and natural gas. Crude oil and natural gas prices have risen to highest since 2012. India imports 85 percent of its oil and gas requirements. Direct crude oil-dependent sectors include paint makers, lubricants, fertiliser, plastics, clothing, transportation, etc. Since majority of industries/sectors are oil dependent, higher oil prices would lead to all around inflation. This may severely impact the post Covid-19 economic recovery.
Russia and Ukraine together account for 30 percent of the global supply of titanium, which is used extensively in aerospace and armament industries. Some 90 percent of the world supply of neon comes from Russia and Ukraine. While Russia is a major supplier to the semiconductor industry with important metals such as palladium, Ukraine supplies special gases such as neon and helium, which are required for chip making. The semiconductor industry is going to bear a massive brunt with chip-dependent sectors like automobile, IT and smartphones sectors badly impacted. Russia produces around 6 percent of the world’s aluminum and 7 percent of nickel. Nickel is used in stainless steel and batteries.
Russia and Ukraine also make up 80 percent of the global sunflower oil exports and are the highest exporters of wheat. In 2021, India imported a total of 18.93 lakh tonnes of crude sunflower oil from Ukraine and Russia. Therefore the edible oil industry would also be badly hit.
There may be a few gains also. With western nations imposing economic sanctions on rich Russians, including seizing their luxury yachts, villas and freezing bank accounts, it may impact the evasion of black money in banks of western nations and investments in major property in western nations.
Fuel prices have not risen due to the ongoing UP elections. Expect fuel prices to rise soon after. There would be inflation in all sectors and expect price rise of edible oil, clothes and yarns, batteries, mobiles, computers, etc.
There are no winners in wars. Both parties are losers. The impact of the Russia-Ukraine war would be felt across the globe, including Arunachal and the Northeast. In order to minimise global impacts, India and Arunachal need to refocus on Atmanirbhar Bharat and ‘Vocal for local’. Hoping for the war to end soon. (The contributor is retired Group Captain, Indian Air Force)
