With the first round of negotiations coming to an end and the number of countries announcing new economic sanctions on Russia growing, the Russian invasion of Ukraine is posing a serious threat to global trade. Russia, the world's third-biggest producer of petroleum, is a major exporter of natural gas, while Ukraine is the breadbasket of Europe, and besides being impacted due to these two factors, global trade can severely be hit if the tension continues for long.

India seems to be concerned as well. The Finance Minister has said that the Centre is worried about impact of the war on India's export-import trade. Russia is a major trading partner of India, with exports of $2.5 billion and imports of $6.9 billion in the first nine months of FY2022. Additionally, higher prices of global crude oil may hit our import bill. Also, the cascading effects of expensive fuel cost may weaken the rupee and trigger a general inflationary trend.

This situation needs to be closely monitored by the Centre. It is also important that interests of the Indian exporters are taken care of. No doubt, it will take some more time to evaluate the retaliatory sanctions imposed on Russia, but urgent steps should be taken, as pointed by an exporters' body, to ensure that shipments at present at the ports or in the voyage are quickly cleared and loss to exporters is sympathetically considered by the government.

Meanwhile, India's GDP growth slowed to 5.4 percent in October-December 2021 and the economy is expected to grow 8.9 percent in the fiscal year ending March 31, down from the earlier estimate of 9.2 percent. These figures are not that discouraging, but the economy is now facing new geopolitical risks amid which the Centre must work harder to ensure that the economic recovery continues.