How do you think the Ukraine situation could rub off on the global markets and also on India?

Ukraine's situation promises to be a prolonged war-like situation across multiple mediums. The impact of the war will be felt much beyond the borders of the CIS states and will eventually encompass most of the world economy. The fact is that economies have seen billions of dollars of wealth wiped out in a short span of time. Here is why.

a) If the situation worsens, the first thing investors will do is to jump to safe-havens. Investors could be rushing back to bonds, generally seen as safe assets. You could also see money going towards gold, although that looks less likely with interest rates already so high. The worst situation would be emerging market currencies in a free fall.

b) Large tracts of the world are fed by the breadbaskets of Ukraine. Not to forget that the Black Sea is the biggest port for the export of wheat from Ukraine, Russia, Kazakhstan, and Romania. These are likely to get hit by war-related restrictions or outright sanctions by the West on Russian goods.

c) How can you forget the impact on oil and natural gas? Russia is the second-largest producer of oil and Europe still relies on Russia for around 35% of its energy needs. If Germany cuts imports of gas via the Nord Stream 2 pipeline, gas prices could go through the roof. After all, Ukraine is the biggest transit point for Russian oil.

d) Then there is the problem of global business color. British Petroleum owns 19.75% of Rosneft, which accounts for one-third of all its production. Shell has 27.5% of Russia’s first LNG plant, Sakhalin 2. Even ONGC Videsh and Essar have extensive Russian connections.

e) Keep a watch on currency cracks. Sanctions could lead the Rouble to crash. This is likely to pressure most emerging market currencies. If China looks to weaken the Yuan, the Indian rupee may also go into a free fall. To cut a long story short, the implications could actually be quite devastating for currencies.