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Russia-Ukraine war: Indian exports worth $500 mn face uncertainty over credit guarantee withdrawal | Economy News

New Delhi: India’s exports worth $ 500 million to Russia and the CIS (Commonwealth of Independent States) have been hit by a Foreign Secretary’s decision to remove cover for goods bound for the war-torn region. Sanctions on Russian banks and panic attacks in the Baltic ports following the Ukraine attack have forced the ECGC to come to this decision. However, this has made the Indian exporters unhappy.

According to official data, India’s exports to Russia by 2021 are worth $ 3.3 billion, and imports are worth $ 8.5 billion, including oil and gas products worth $ 4.5 billion. India exports medicines, telephone equipment, water products, automobiles and tea to Russia. (Read also: Russia-Ukraine War LIVE)

India exports another $ 1.5 billion worth of goods to the CIS, according to industry figures. The CIS is a country that broke away from the Soviet Union, and most of India’s exports to the region went through Russia. ECGC covers nearly 15 percent of transit bound for Baltic states. (Read also: Russian troops have slowed down ‘speed of anger’, Ukrainian military says)

Western currencies have traded in dollars, pounds or unsecured euro currencies for Indian traders. In this case, trading in Russian ruble or Indian rupee is the only way out. The U.S. Office of Foreign Assets Control has imposed sanctions on a number of Russian banks, but exports at the pharmacy, which is the largest share of Indian exports to Russia, agriculture and energy, have been eliminated.

Navigation capacity issues are another big concern for Indian retailers. The Ukraine crisis and subsequent sanctions on Russia have raised crude prices, as Moscow is one of the world’s largest producers of oil and natural gas. Traders also fear another spike in increased freight rates due to epidemic locks caused. Box rates are 81 per cent higher than they were a year ago.

Around 12 pm on February 28, Brent crude was trading at $ 102.50 per barrel, higher by 4.57 percent from its previous close. West Texas Intermediate (WTI) prices increased 4.89 per cent to $ 96.48 per barrel.

India is the third largest oil importer in the world and relies on imports to meet 85% of its oil demand and 55% of its natural gas requirements. India spent $ 62.71 billion on crude oil imports at FY21, $ 101.4 billion on FY20, and $ 111.9 billion on FY19. No wonder, then, that he closely monitors the Ukraine conflict.

India is also training the influence of Western sanctions on its security agreements with Russia. It recently signed a $ 5.4 billion contract for five S-400 air defense systems. Russia is one of the leading suppliers of security equipment and technology to India, while the latter power companies have invested in Russian oil and gas blocks. ONGC, Indian Oil Corporation, Indian Oil and Bharat Petro Resources are estimated to invest more than $ 13.6 billion in Russia’s oil and gas services.

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