Consider impact on other nations before imposing sanctions: FM
She also blamed rising commodity prices due to Ukraine war for the high inflation
Pointing out that sanctions imposed on Russia could have an unintended impact, finance minister Nirmala Sitharaman on Wednesday said the ‘collateral’ impact of these measures on a wide spectrum of nations should be factored in while taking such a decision.
She also blamed the rising commodity prices due to the Russia-ukraine war for the high inflation in many countries as supplies of essential items such as food grains have been disrupted.
However, India has huge stocks of wheat and wants to export, she said.
Sanctions have always had an impact not just on the economy of the country on which they have been imposed but also on many other countries, she said at Stanford University.
“I suppose this is the situation because we are globally more interconnected. So, when sanctions are decided to be imposed, these unintended consequences may have to be factored in when the decision making happens,” she said.
Sitharaman said the
Swift-related sanctions imposed on Russian banks can have collateral and unintended impact on many other countries.
India’s position is not just for its economic interest but also its security, she asserted. The FM added that every decision that the country has taken is based on its geopolitical location.
Sitharaman also said that in this inter-connected world, inflation spreads faster. This time, it will not increase just due to the US Federal Reserve’s actions but largely because of commodity prices.
Essential commodities such as food grains are becoming rarer because Ukraine — a large supplier of wheat and edible oil — is in disarray, she said.
This space would be vacant as not many countries can produce such quantities of wheat even as India is sitting on stockpiles of wheat and wants to export.
Besides, crude oil price is not dropping below $100 a barrel, and that is going to heat up many economies, Sitharaman said.
“With the prices remaining high and supplies — including of natural gas — being constrained, the inflation problem is being aggravated,” the finance minister.