The G-20 leaders’ recommendation to revive the Black Sea Grain Initiative (BSGI) to help the movement of grains, food, and fertilisers from Russia and Ukraine to the rest of the world, would help ease inflation in several countries, but may not affect India’s own inflation trajectory much, Finance Minister Nirmala Sitharaman said.
Speaking after the leaders adopted the New Delhi Declaration, External Affairs Minister S. Jaishankar noted that leaders recognised the significant implications for the global economy arising from the ongoing war in Ukraine, and the impact it has had especially on developing and least developing nations that are still recovering from the pandemic and economic disruption. “The three F’s — Food, Fuel, and Fertilisers — were issues of special concern,” he said.
“On inflation, globally, it will have an impact as soon as the understanding is executed and grain movement starts from Russia and Ukraine. As a result, inflation in food grains should cool off,” Ms. Sitharaman said.
“Domestically, we don’t depend so much on imports for grains, apart from maybe sunflower oil, our imports are not so much dependent on those two countries. And to the extent vegetable oil is concerned, there may be some relief. But largely, India’s domestic inflation is impacted by the vagaries of monsoon and supply side issues, not so much as other countries that depend a lot more on grain imports for their consumption,” the Minister said.
G-20 leaders, as per Para 11 of the declaration, 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” and “called for the cessation of military destruction or other attacks on relevant infrastructure”. Mooting “immediate and unimpeded deliveries of grain, foodstuffs, and fertilizers/inputs from the Russian Federation and Ukraine”, they said this is “necessary to meet the demand in developing and least developed countries, particularly those in Africa”.