As the war between Russia and Ukraine continues, it threatens to disrupt the global supply chain, which is still recuperating from the COVID-19 pandemic's impact. The current crisis may also result in price increases at a time when inflation is a big worry for countries all over the world, affecting sectors and families in general. The overall impact on inflation may extend beyond gasoline prices, as Russia and Ukraine are significant sources of cooking oil, fertilizers, and palladium for India.
As Russia bears the brunt of the sanctions imposed by Western nations for Ukraine's invasion, including the exclusion of many Russian banks from the interbank payments system SWIFT, the ongoing conflict has the potential to harm industries that rely on Russia for raw materials, particularly industrial commodities. All of this is likely to lead to another wave of shortages in a globe still reeling from the effects of the epidemic.
Many European nations rely significantly on Russian energy, notably gas, which is delivered via numerous critical pipelines. Even if the situation is resolved, it is possible that the heavy economic penalties imposed on Russia would make it impossible for these nations to buy gas.
With global transportation already badly hampered as a result of the epidemic, the conflict is expected to exacerbate the situation. Ocean shipping and rail freight are two types of transportation that are likely to be affected. While rail only transports a small part of overall freight between Asia and Europe, it has been critical during recent transportation bottlenecks and is slowly rising.
The current crisis would raise energy and edible oil costs in India, rising inflation. Ukraine accounts for nearly half of all sunflower oil exports. Importers will struggle to replace supply if harvesting and processing are hampered in a war-torn Ukraine, or if exports are halted. With the acute potential of supply disruptions, enterprises in India have few alternatives except to contemplate raising the cost of daily-consumed edible oils within weeks.
The ongoing war not only impacts transport, energy, oil, but also make a significant impact on metal, white goods, microchip, auto, and food security across the globe and India. Russia and Ukraine are the world's largest producers of metals such as copper, and nickel. The price of certain metals has risen as a result of Russia's sanctions.
Apart from general inflation, white goods such as air conditioners and refrigerators are anticipated to suffer price increases owing to increases in copper, aluminum, steel, and plastic costs. In addition, the conflict is predicted to have a significant impact on the car industry. The rise in oil costs, as well as the persistent scarcity of semiconductors and chips, as well as other rare-earth metals, are anticipated to exacerbate the industry's troubles. Furthermore, Ukraine is home to a large number of enterprises that manufacture automotive components for manufacturers.