India may not have fully felt the impact of the ongoing US-Iran conflict yet, but tougher days could be ahead, according to billionaire banker and founder of Kotak Mahindra Bank, Uday Kotak.
Speaking at the CII Annual Business Summit 2026, Kotak warned that rising energy prices linked to tensions in West Asia could soon begin hurting consumers and businesses, especially those already struggling with limited incomes.
He urged both companies and households to prepare for difficult times instead of waiting for the economic impact to become visible.
“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.
Kotak said many Indians have not yet experienced the full effect of rising oil prices because older inventories are still cushioning the immediate impact. However, he believes the pressure will eventually reach households through costlier fuel and higher prices of everyday goods.
“The consumers have not felt the pressure at all,” he said, adding that families with limited incomes may find it especially difficult to manage rising expenses.
He explained that even if people do not directly spend more on fuel, transport and fuel-linked costs often push up prices of many daily essentials.
“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,” Kotak warned.
The remarks come at a time when crude oil prices have been rising sharply due to uncertainty around the fragile US-Iran ceasefire and fears of supply disruptions through the strategically important Strait of Hormuz. The Indian rupee has also weakened against the US dollar, while stock markets have seen sharp swings.
Kotak also stressed that India should not remain in what he described as a “comfort zone” during uncertain global conditions. According to him, countries now need to be more cautious and strategic 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 said India’s heavy dependence on imported oil makes the economy vulnerable to global shocks. India imports more than 85% of its crude oil needs, meaning a sharp rise in prices can affect inflation, the rupee and the country’s financial stability.
Kotak pointed out that India’s current account deficit remains manageable when crude oil prices are near $60 a barrel. But if oil climbs towards $100 a barrel, economic pressures could increase significantly.
Kotak’s comments come shortly after Prime Minister Narendra Modi appealed to citizens to conserve fuel, avoid unnecessary foreign travel and postpone non-essential gold purchases as global uncertainty rises.
Backing the broader message, Kotak said countries should avoid “living beyond their means” during periods of instability.
“There are some simple things that a country can do, which is to moderate unnecessary consumption,” he said, adding that nations must think carefully about their financial position, much like managing a balance sheet.
Meanwhile, Kotak’s warning reflects growing concern among policymakers, economists and business leaders over the economic fallout from rising energy prices and prolonged instability in West Asia.