Russia-Ukraine crisis to widen India’s CAD

Geopolitical risks emanating from the Russia-Ukraine conflict is expected to push India’s import bill higher.

Consequently, the trend will widen the country’s Current Account Deficit.

The crisis is expected to increase prices of mineral fuels and oils, gems and jewellery, edible oils and fertilisers.

At present, India has a significant import dependence for these items.

As a result, merchandise imports may cross $600 billion in FY22, said India Ratings and Research (Ind-Ra).

The immediate impact of the conflict on the Indian economy will be felt through inflation, an increase in current account deficit and rupee depreciation.

0

0