Kotak warns amid the escalating US-Iran war, says India must prepare itself for economic shocks, rising oil prices and inflation pressure.
Uday Kotak, Finance industry veteran has warned India that it could soon face a serious economic crisis due to the ongoing West Asia war, leading to rise in crude oil price, urging both businesses and policymakers to be ready for long term financial shock.
Speaking at the CII Annual Business Summit 2026 in Delhi, Kotak said the full impact of the West Asia conflict has not yet reached Indian consumers, especially in terms of fuel and energy prices.
“We have not seen the impact in the last two months of the Middle East war in terms of energy price transmission,” Kotak said. “It’s coming, and it’s coming big, and consumers have not felt the pressure at all.”
As reported by Hindustan Times, Kotak said oil companies have so far absorbed much of the burden despite the sharp rise in global crude oil prices.
Uday Kotak Warns of Economic Shock
Kotak cautioned against complacency and said India should prepare for the worst-case economic scenario if the conflict continues.
“My view is we should prepare for paranoia before the event,” he said, adding that the country should remain ready for tougher economic conditions ahead.
The banking veteran highlighted India’s dependence on imported oil, which accounts for more than 85% of the country’s total requirement. According to him, any further increase in crude oil prices could trigger inflation, weaken the rupee, and impact overall financial stability.
“Be ready for tough times, rather than waiting for the shock to hit us,” Kotak said, noting that expectations of the Iran conflict ending quickly have repeatedly failed since February.
As reported by Hindustan Times, Kotak also stressed that India needs stronger financial discipline at both government and corporate levels to handle long-term economic uncertainty.
Also Read: PM Modi Calls for Cutting Foreign Product Use Amid WFH, Gold and Petrol Conservation Push
#WATCH | Delhi: Founder of Kotak Mahindra Bank, Uday Kotak says, "My view is we should prepare for paranoia before the event. We must hope that tough times do not come or remain, but we must prepare for the worst. It is about preparation. Be ready for tough times, rather than… pic.twitter.com/A9sabctqel
— ANI (@ANI) May 12, 2026
Oil Prices and India’s Energy Challenge
Earlier during the summit, Union Petroleum Minister Hardeep Singh Puri said oil marketing companies are currently facing losses of nearly ₹1,000 crore every day while keeping fuel prices stable for consumers.
He went on to say that global benchmarks for crude oil have increased from approximately $65 to almost $115 per barrel, putting more financial strain on energy firms.
The under-recovery estimates in the first quarter of the year were likely to be up to ₹1.98 lakh crore, according to the minister. However, despite the worldwide disturbances, India has ensured uninterrupted supplies of energy.
As reported by Hindustan Times, the government said India currently has crude oil and natural gas reserves sufficient for nearly 60 days of demand, while LPG supplies provide around 45 days of cover.
Kotak also said India’s long-term economic strength would depend on efficient resource utilisation and the ability to build resilient businesses capable of handling global volatility.
Kotak Pushes for Long-Term Business Strategy
Kotak criticised the growing focus on short-term business cycles and quarterly performance targets in corporate India.
“The ability to take a 3-5 year view is significantly required, and is missing,” he said, urging companies to move beyond stock market-driven decision-making and short-term incentives.
Meanwhile, the Centre attempted to reassure citizens over India’s energy reserves. The government also noted that India’s foreign exchange reserves currently stand at nearly $703 billion.
PM Modi Calls for Austerity Measures
PM Modi has requested the people of India to reduce fuel consumption and adopt austerity measures amid the geopolitical crisis.
At rallies held in Gujarat and Hyderabad, the Prime Minister suggested working from home and also recommended not purchasing gold in order to relieve pressure on the nation’s economy.
The comments have sparked controversy among Opposition politicians, who claim that the government could be setting the stage for tougher economic policies, including increased fuel costs.
As stated in Hindustan Times, Congress Party leader Jairam Ramesh pointed out that the remarks made by the Prime Minister showed that stricter cost-saving policies would be implemented in the coming period.
Another critic was Samajwadi Party leader Akhilesh Yadav who challenged the appropriateness of the economic warnings issued by the government, claiming that BJP leaders had been spending excessively during their elections.
Also Read: Vijay Floor Test, AIADMK Rift Grows Ahead of Tamil Nadu Trust Vote
