Indian Economy vs War between Ukraine and Russia
- Rising crude oil prices are likely to hurt the Indian economy .
- However, it may also benefit the country with the global players looking for alternative source for commodities like steel and aluminum where Indian businesses can benefit.
- As per ICICI Securities, Oil prices would remain elevated (well above US$90/bbl) for several months, once the US imposes additional sanctions on Russia, including its ability to export oil & gas, following a possible Russian invasion of Ukraine.
- Once the retail fuel prices are fully passed on, it might reflect in inflation on the ground and could result in a small decline in consumption.
- High oil prices would benefit the upstream oil companies and even downstream may see some positive inventory effect (transient), it says.
- As per Ask Investment, the impact could be limited. Consumers could see longer input price pressures while commodity businesses may benefit on account of higher prices for longer.
(Disclaimer: Author suggests its readers to consult with their investment advisers before making any financial decision.)
