Introduction to India’s Resilience
Concerns loomed large on India’s double standard for its neutral stand on the Ukraine–Russia war and sanctions on Russia. Analysts apprehended India’s isolation from global geopolitical influence and the global market, which could slow down its growth. Nevertheless, outsmarting all the apprehensions, India underpinned a smooth and uninterrupted growth, defying the spill-over impact of the war.
Global Economic Impact
The IMF foresaw a slip in global growth, forecasting it to 3.2 percent in 2022, from 6 percent in 2021, and a further fall to 1.3 percent in 2023. In contrast, India’s GDP growth spurred to 9.4 percent and 7.2 percent in 2021-22 and 2022-23, respectively, surpassing China’s growth. The war triggered massive food inflation and energy crisis in the EU, with Russia being the biggest supplier of wheat, gas, and oil to the region. Nearly 80 percent of the pipeline passes through Ukraine, making the situation even more critical.
Impact on Developing Nations
The Russia-Ukraine war dented developing and emerging nations, like ASEAN, even though Russia and Ukraine do not have significant economic influences in these nations. The region succumbed to a spill-over impact due to sanctions by the USA and EU on Russia. However, India is lauded for its resilience when compared to Asian emerging nations, including China. In 2022, except for Vietnam, India’s growth outpaced ASEAN-5 and China.
Factors Contributing to India’s Resilience
Food Self-Sufficiency
India has become a food surplus country from being a food shortage nation in the mid-sixties. It is the world’s largest exporter of rice and the second-largest producer of foodgrain, wheat, sugarcane, groundnut, fruits, and vegetables. This growth trajectory helped India to rein in the global food crisis erupted due to the Ukraine war. While global food prices triggered and became a major headwind to food import-dependent nations, such as the EU, India proved resilient.
Hedge from Oil Crisis
India is an oil deficit nation, with over 90 percent of its oil requirement met by imports. However, with a timely approach to Russia, utilizing its long years of political hobnob, and denouncing oil sanctions, India diversified its oil imports from Russia. This was a successful political win-over by India, while challenging EU sanctions on Russia. From a mere 2 percent oil import from Russia in the pre-war period, oil import from Russia surged to nearly 35.7 percent in 2023-24.
Containing Inflation
India became resilient to oil-driven global inflation for the first time. The CPI (Consumer Price Index) hovered around a 6.6 percent increase in 2022-23, which was much lower than global inflation of 8.8 percent. It fell further to 4.36 percent in 2024-25. This demonstrates India’s ability to manage its economy despite global challenges.
Conclusion
In conclusion, India could withstand the global shock of the Russia-Ukraine war by virtue of its strong economic fundamentals and political maneuvering in the global power game, reposing confidence in neutralizing the war effect. Its food self-sufficiency, hedge from the oil crisis, and ability to contain inflation have been key factors in its resilience. As the world continues to navigate the complexities of the war, India’s growth trajectory is expected to lead the global economy, making it an attractive nation for investment and growth.
