India unlikely to face major food or fertiliser crisis, says Finance Commission chairman

"Looking at the overall market, I do not think we are heading towards a crisis," Finance Commission chairman said (Photo: ANI).

NEW DELHI: India is unlikely to face a major food or fertiliser crisis, despite ongoing global conflicts, the Finance Commission chairman said on Saturday. Speaking to news agency ANI, 16th Finance Commission chairman Arvind Panagariya said the country has bolstered its fertiliser supplies and shown that it can withstand recent energy shocks.

Earlier this week, foreign minister S Jaishankar said that the Ukraine and West Asia conflicts were affecting grain exports and fertiliser production, while energy costs and tighter financial conditions were adding further strain on developing economies.

"If we look at our recent experience with the war in West Asia and the way we were able to handle the energy side, I do not think there is anything here that we need to fear very seriously," Panagariya said. He noted that India's fertiliser position had strengthened, partly because domestic plants had been restarted, and that supplies could also be obtained from other countries.

"There is supply, and fertilisers can also be purchased from other countries," he said. He added that although the West Asia conflict had created uncertainty, the large energy shock that had been feared had not materialised for India. The government has also stated that it has kept fertiliser availability adequate in spite of West Asia-related supply disruptions, through domestic production, diversified imports and advance stocking.

According to Panagariya, India had succeeded in limiting the impact of the energy shock on households, although commercial LPG users, such as restaurants and hotels, faced some temporary pressure. "We were able to absorb this shock quite well. Going forward, I believe our ability to absorb such shocks will increase, not decrease," he said.

According to the chairman, disruption to supplies from major producers such as Ukraine could, in fact, increase demand for certain Indian exports. "If the war leads to lower supplies from Ukraine, demand for our food products could increase," he said. "If that pushes prices higher, our exporters would benefit."

"Looking at the overall market, I do not think we are heading towards a crisis," he added.