Today morning, Russian President Vladimir Putin announced that a “full-scale invasion” has started in Ukraine by the Russian military.
The conflict started looming weeks before as tensions raised between Russia and its neighboring country.
Now that the NATO-allied countries have started to implement sanctions over Russia, it is believed to disrupt economies throughout the globe.
Let’s take a closer look at these scenarios.
Russia’s dominance over the world
Russia is one of the largest crude oil producers in the world. They are a key supplier of energy globally.
Most of Europe relies on Russia for about a quarter of its oil supplies and a third of its gas.
Just as the invasion started, Brent oil prices have reached an all-time high surging above $100 per barrel.
It is expected to be in three digits for another 3-6 months.
Why does Ukraine matter?
Ukraine is the second-largest country by area in Europe and has a population of over 40 million.
It also has rich natural resource reserves.
Let’s understand Ukraine’s global ranking in exports, natural reserves, and business.
Natural Resources & Industrial Dominance
Titanium Ores – No.1 in Europe
Coal reserves – No.7 Worldwide
Iron Ores – No.2 Worldwide
Shale Gas – No.3 in Europe
Mercury Ores – No.2 Worldwide
Total Natural reserves – No. 4 Worldwide
Steel Production – No. 10 Worldwide
Ammonia production – No.1 in Europe
Defense – No. 9 Worldwide
Arable land area – No. 1 Europe
Black soil – No.3 Worldwide
Barley Production – No. 2 Worldwide
Sunflower, Sunflower oil – No. 1 Worldwide
Rye, Honey – No. 5 Worldwide
And many more.
What effects will Ukraine Russia conflict have on Indian Business?
“Even today in the FSDC meeting when we were looking at the challenges posed for financial stability, crude was one of the things.
International worrisome situations, where we actually voiced that we want diplomatic solutions for the situation developing in Ukraine, all these are headwinds”, said finance minister Nirmala Sitharaman.
India accounts for less than a 1% share of Russia’s crude oil exports. So the Indian economies are hard to get hit on this front.
But it is expected that a 15% hike in Yarns in the coming weeks.
All apparels would see an average of 30% hike in the prices.
Since the demand for products is not decreasing, there can be substantial growth in the textile industry.
Opportunities for Indian Businesses amid Russia-Ukraine conflict
The European Union is the largest importer of Indian goods.
Since the European supply chain will be disrupted, there will be a huge demand for Indian goods.
India has seen tremendous export growth in the last year and is expected to see further growth with this crisis.
More and more companies will be selecting India as their alternate supplier.
Textile Industry is also expected to benefit from this crisis as more and more countries will now be looking for India for uninterrupted materials.
Indian manufacturing won’t be affected in-depth as India is not reliant on Russian energy.
Conclusion
In every crisis, there will be an opportunity.
Just like the one we are presented with.
But war is not good for the common man.
We deeply condemn the violence and the killing of innocent people.
What are your thoughts on this scenario? How do you see the Indian textile getting affected? Comment below.
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