G20 Summit: 'India's inflation dynamics shaped by monsoon, not global conflicts,' says FM Sitharaman

Finance Minister Nirmala Sitharaman on Saturday said India’s inflation is largely affected by the vagaries of monsoon or supply-side issues and is not related to the ongoing war between Russia and Ukraine.

At G20 Summit in New Delhi, the Union minister added that countries that are dependent on Russia and Ukraine for grains will be affected. “Domestically we have very little grains coming in from Russia and Ukraine. Except for edible oil particularly sunflower oil, India’s imports are not much dependent on these two countries. However, there are times when we brought in extra edible oil and therefore to certain it will have little impact on domestic inflation,” Sitharaman said.

Retail inflation, as measured by the consumer price index, surged to a 15-month high of 7.44 per cent in July this year from 4.87 per cent a month ago as prices of food items, especially vegetables, shot up. Inflation in the consumer food price index inflation rose to 11.51 per cent in July while inflation in the food and beverages basket jumped to 10.57 per cent. Retail inflation in vegetables surged to 37.34 per cent last month from a deflation of -0.93% in June.

India imported around oil seeds worth $500,000 from Russia in FY23 and $300,000 from Ukraine in the last financial year. Overall, India imported worth $46.53 billion and $0.66 billion of goods from Russia and Ukraine, respectively, in FY23

While talking about Ukraine, the government has highlighted the human suffering and negative added impacts of the war in Ukraine with regard to global food and energy security, supply chains, macro-financial stability, inflation and growth. Government said this has complicated the policy environment for countries, especially developing and least developed countries that are still recovering from the Covid-19 pandemic and the economic disruption, which has derailed progress towards the SDGs. There were different views and assessments of the situation.

(With inputs from Prince Tyagi)