Billionaire banker Uday Kotak has warned that India could soon begin feeling the economic consequences of the ongoing West Asia conflict involving the United States, Israel, and Iran, particularly through a rise in energy prices.
Speaking at the CII Annual Business Summit 2026, the founder of Kotak Mahindra Bank said that the full impact of higher oil prices has not yet reached Indian consumers, but cautioned that conditions could deteriorate in the months ahead.
India Yet To Feel Full Impact Of Crisis: Kotak
“We have not seen the impact in the last two months of the Middle East war in terms of energy price transmission. It’s coming. And it’s coming big,” Kotak said.
He noted that existing fuel inventories have so far cushioned the immediate effect, which is why households have not experienced a sharp rise in costs. However, he warned that price pressures would eventually pass through to fuel and, in turn, to the cost of goods and services.
“The consumers have not felt the pressure at all,” he said, adding that lower- and middle-income households could be the most affected if inflation continues to rise.
Kotak’s Warning For Middle-Class Families
Kotak also emphasized that fuel prices indirectly strain household budgets by increasing transportation and supply chain costs. “Think about a consumer with limited income, having to spend more directly on fuel and indirectly on other items dependent on fuel. The shock is coming,” he warned.
His comments come amid concerns over volatility in global energy markets due to tensions in West Asia and uncertainty around a fragile US-Iran ceasefire. Fears of disruptions in oil supplies through the strategically important Strait of Hormuz have already pushed crude prices upward. Meanwhile, the Indian rupee has weakened against the US dollar, and equity markets have seen sharp swings.
Nations Must Become More Cautious: Kotak
The banker also cautioned that India cannot remain in a “comfort zone” amid rising global uncertainty and geopolitical instability. He said countries must adopt a more cautious and strategically prepared approach as the world becomes increasingly fragmented and protectionist.
“My view is we should prepare for paranoia before the event,” Kotak said. “We must prepare for the worst,” he added.
Highlighting India’s dependence on imported crude oil, he noted that the economy remains vulnerable to external shocks. India imports more than 85% of its oil requirements, making it sensitive to global price fluctuations that affect inflation, currency stability, and overall economic health.
He further said India’s current account deficit remains manageable when crude prices stay near $60 per barrel, but warned that a rise toward $100 per barrel could significantly increase economic pressure.
Kotak made these remarks shortly after Prime Minister Narendra Modi urged citizens to reduce fuel consumption, avoid unnecessary foreign travel, and defer non-essential gold purchases amid global uncertainty. Supporting the broader message, Kotak said nations should avoid “living beyond their means” during volatile economic periods.
“There are some simple things that a country can do, which is to moderate unnecessary consumption,” he said, adding that governments should assess their financial position carefully, much like maintaining a balance sheet.
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