Right now, uncertainty prevails on pretty well every front. India’s navy watched with alarm as Russian bombers targeted Zorya Mashproekt, the Ukrainian firm that makes gas turbines for many Indian naval vessels. Similarly, our air force eyed with dismay Russian forces pounding Kyiv’s Antonov plant. India’ has got over 100 Antonov AN-32s which are the IAF’s transport workhorse (the AN-32 fleet has been particularly busy since the Ladakh standoff).

Ukraine used to be a distant land on few Indians’ radar. But as Russian tanks rolled into Ukraine we’ve learnt just how connected we and other nations are with that corner of the globe. For one thing, there’s the food fallout. World Food Programme chief David Beasley warns the “bombs in Ukraine could take the global hunger crisis to levels beyond anything we’ve seen.” 

Prices of corn, sunflower oil, palm and soybean oil have rocketed, hitting Indian household budgets. But the war has provided us with one unexpected opportunity. We’re hoping to seize the gap in the wheat export market left by Russia and Ukraine, known as the world’s breadbaskets. 

Petroleum has been flirting with $110 a barrel (way above the government’s $70-75 budget estimate) and if Europe moves decisively to wean itself off Russian fuel, there’s no telling how high prices could get. A litre of petrol has crossed the psychological ₹100-mark in Delhi and it’s ₹115 in Mumbai. Supply chain turmoil triggered by Covid-19 was already stoking inflation globally and energy and commodity price rises provoked by the war will only drive it higher. 

And inflation acts like a tax. As people pay more for food and fuel basics, purchases of other goods and services decrease, known as growth-throttling “demand destruction.” Goldman Sachs has predicted US GDP will expand by just 1.75 per cent in 2022, slowing from 2021’s 5.7 per cent, and it rates recession chances at 20-30 per cent. For India, too, economists are taking red pencils to forecasts.. UNCTAD, for instance, has cut its calendar 2022 projection to 4.6 per cent from 6.7 per cent.  

Talks have already begun between Russia and Ukraine in Istanbul and there are indications of progress. Russia is promising to sharply reduce military operations around Kyiv while Ukraine is offering to not join NATO and proposing possible concessions on territory occupied by Russia, like Crimea. Ukraine and eastern European nations, though, have a problem: they don’t trust President Vladimir Putin and fear any ceasefire would only be a cover for Russian forces to regroup for a new offensive. 

What’s important to realise, though, is even if peace does break out, the war’s after-effects will reverberate for years. But it’s an ill-wind that blows nobody any good and arms-makers are the big winners. The US aims to hike defence spending to $773 billion from last year’s $686 billion. Similarly, Germany and other European countries are planning big defence spending increases, heralding Europe’s remilitarisation after 77 years of peace.

Defence equipment

For our military, the war is plainly bad news. For instance, as we mentioned, we buy gas turbines from Ukraine. They’re fitted into warships made in Russian shipyards. Even before the war, we faced grave problems with Ukraine refusing to sell turbines directly to Russia. That forced us to intervene to pull off a multilayer transaction by which we bought the turbines and sold them on to Russia. Now, with Zorya Mashproekt being bombed, it’s unclear where those gas turbines will come from. 

With the war on it’s safe to assume those components won’t be reaching Ukraine. Also, Washington’s wide-ranging export controls are aimed at cutting off Russia’s chip supply. This could stymie its weapons-making capabilities and obviously hamper its ability to meet our military orders.

The Stockholm International Peace Research Institute calculates India purchased 62 per cent of its arms from Russia between 2010-2020. During Putin’s December state visit, we signed a $600-million joint-venture to make AK-203 rifles in Amethi, plus a military-technology cooperation pact.

Now, the question is whether these deals can successfully proceed. Firstly, Moscow will be tied up rebuilding its own weapon stocks and, secondly, there’s risk of US sanctions affecting some project aspects.

And look for a minute beyond our current military purchases. India’s fighter aircraft are mostly Su-30s, MiG 29s and MiG 21s while six of the navy’s Talwar class destroyers and many other vessels are Russian origin. That includes our one nuclear-powered submarine and our only aircraft carrier. 

As for the army, our main battle tanks are all modified T-72s or T-90s. As a US Congressional report says: “Many analysts in India and beyond conclude the Indian military cannot operate effectively without Russian-supplied equipment and will continue to rely on Russian weapons systems in the near and middle terms.”

So, the issue facing military planners is whether, under current circumstances, we will be able to fight a prolonged war. The lone bright spot in this picture is Pakistan’s main battle tanks were made in collaboration with the Ukrainians and could be out of action soon if parts are in short supply.

Way forward

What’s the way forward for India? We’ve flagged our determination to step up our self-reliance in weapons and in other areas through Make in India but those efforts are going to take a decade to reach critical mass, analysts say. It’s definitely not beyond us though. Naval strategist Admiral Arun Prakash notes, for instance, gas turbines aren’t complicated and we should have been making them decades ago.

Still, we face a tightrope walk. We must balance between the Russians and the Ukrainians without annoying either side. We also must seek to counter fallout from our UN abstentions that have attracted hostile US attention. As it is, our $5.4-billion purchase of Russia’s S-400 missiles has already prompted US senators to talk of CAATSA (Countering America’s Adversaries Through Sanctions Act). We’re signalling furiously to Washington that our many abstentions don’t mean we are part of the Russian camp.

Fortunately, we’re still seen as a crucial Quad member to counter China’s rising threat which should keep the Biden administration onside for now. That said, it will require considerable diplomatic finesse to keep everyone happy in coming months. 

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