Three-fourths of CEOs and business leaders polled in an ET survey see moderate or no impact on the Indian economy from the Russian invasion of Ukraine, with over half of them expecting a top-line growth of over 15%. Over 70% of 40 CEOs surveyed want the government to slow down fiscal consolidation to support growth and 60% do not see the geopolitical situation impacting their capital expenditure plans.

More than half of those polled see the price of their products or services rising over 5% due to higher input costs and other impacts of the war- 32.5% expect a price rise of 5-10% while 25% see over 10% increase. The poll responses are from 40 CEOs across the manufacturing, services and infrastructure sectors. Over a third see GDP growth in the range of 7-8% in the next fiscal, in line with independent economists, while 27.5% expect the economy to rise over 8%.

The Russian invasion of Ukraine has destabilised global financial markets, sent commodities and crude prices surging, firmed up bond yields and caused inflation to accelerate to records in the developed world.

Emerging markets, including India, have seen sharp capital outflows and currency depreciation, while prices are ticking up.

CEOs Watching Situation Closely

Respondents in ET’s poll do not seem to be perturbed, though they are watching the situation closely.

The recent decline in the price of crude from over $140 a barrel to about $100 and softening commodities prices have also helped improve sentiment.

“The evolving situation is being closely monitored by the industry for its impact on input prices and overall growth path,” said TV Narendran, president, CII, and MD, Tata Steel. “We hope that critical macroeconomic indicators such as the fiscal deficit, inflation, and current account deficit remain within reasonable limits.”

A possible sharp rise in fuel prices, a spike in inflation, and higher commodities and inputs costs for industry are seen as the biggest concerns.

Oil companies have not increased petrol and diesel prices since November despite a sharp rise in crude rates due to elections in five states that ended last week. Analysts say they need to increase prices by about Rs 12-15 a litre.

Nearly two-thirds of those surveyed want the government to cut tax on fuel and absorb some of the expected increase in the prices.

Only about 10% of the respondents said their respective sectors have been impacted severely by the developments while nearly a third have seen no impact. Half of those polled say they have already taken measures (15%) or have started to plan (45%) steps to contain the impact.