Impact of the Russia Ukraine war: Putin’s military operation may reduce the household budget of the average Indian consumer

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Russia’s military operation against Ukraine sent global oil markets into turmoil as Brent crude broke through the $100 mark after nearly eight years. For Indian consumers, the short respite in local fuel prices may soon be over as the backlash from Putin’s actions could squeeze their household budgets.

The pause in fuel price increases despite the surge in global crude is set to end when the final ballot takes place on March 7. by reducing excise duty on diesel by Rs 10 and on petrol by Rs 5.

With diplomacy failing to dissuade Putin from moving forward, the crude oil market as well as gas prices are set to soar further and put pressure on major oil importers like India.

Watch: Can the Ukraine-Russia crisis have a big impact on India?

India must walk a fine line as Russian-Ukrainian tensions escalate. The government must balance its response without harming bilateral relations with Ukraine and Russia. On the other hand, China is getting closer and closer to Russia. Indrani Bagchi, CEO designate of Ananta Center, talks about the ongoing skirmish and the delicate situation that India finds itself in amid the Russian-Ukrainian crisis. Look!

Finance Minister Nirmala Sitharaman, after chairing the FSDC meeting, acknowledged that soaring global crude oil prices pose a challenge to India’s financial stability. She said the government is monitoring the situation.

Putin’s statement on military operations in Ukraine will reverberate on Mint Street, which has so far maintained a dovish stance on monetary policy, prioritizing economic stimulus over inflation worries.

Shaktikanta Das will have to weigh his options in a modified scenario and cut easy money to control pricing.

Cutting taxes again, as it did last year, can ease some of the pain for consumers. Nirmala Sitharaman, while speaking to the press after the FSDC meeting, said the government will come out publicly when it is necessary to intervene.

It remains to be seen to what extent this option can be exercised at a time when the government has large spending plans for the next fiscal scenario and when the tightening of rates could make borrowing expensive.

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