Uday Kotak, the founder and director of Kotak Mahindra Bank, issued a stark warning to Indian businesses at the CII Annual Business Summit 2026. He stated that the world is heading towards a significant economic shock, primarily driven by the escalating conflict involving Iran, urging a mindset of 'strategic paranoia' among companies and policymakers.
The Shifting Global Economic Order
Kotak highlighted a fundamental shift in the global economic order, moving away from a collaborative 'Davos mindset' towards a more volatile, 'tribal' phase reminiscent of pre-1945 dynamics. In this new paradigm, nations are increasingly competing for control over vital trade routes, physical assets, and strategic leverage.
He specifically pointed to concerns surrounding the Strait of Malacca, emphasizing how the artificial intelligence revolution and broader geopolitical shifts have magnified the importance of such strategic chokepoints. Disruptions in these areas, he warned, could have far-reaching economic consequences for countries far removed from the immediate conflict zones. Kotak stressed that in a 'tribal world,' control over assets is paramount, and India must adopt a 'real, strategic, and smart' approach.
India's Vulnerabilities and Strategic Response
The veteran banker also flagged India's significant exposure to rising oil prices. He explained that while the Current Account Deficit (CAD) was manageable at -1% with oil at $60 a barrel, it could widen substantially to -2.5% if oil prices were to surge to $100 a barrel. This vulnerability necessitates proactive measures to mitigate economic strain.
Kotak's warning aligns with recent calls from Prime Minister Narendra Modi, who has encouraged Indians to revert to practices like working from home, conducting online meetings, and reducing non-essential travel – measures previously adopted during the coronavirus pandemic. These suggestions underscore a national effort to conserve resources and prepare for potential economic headwinds.
Concluding his address, Kotak advocated for a 'low-cost reshaping' of the Indian economy. He urged businesses and policymakers to prepare proactively for potential shocks rather than waiting for them to materialize. The emphasis was on taking decisive action and implementing strategic measures to bolster India's economic resilience in an increasingly unpredictable global environment.