Billionaire banker Uday Kotak has warned that Indian households could soon feel the economic impact of the ongoing conflict in West Asia involving the US, Israel and Iran, especially through rising fuel and energy prices.
Kotak said the effect of higher crude oil prices has not yet fully reached consumers because existing fuel inventories are cushioning the immediate impact while speaking at the CII Annual Business Summit 2026. “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,” he said.
‘Prepare for the worst’
Kotak also said India should not remain in a “comfort zone” at a time when the world is becoming more fragmented and protectionist. “My view is we should prepare for paranoia before the event,” he said. “We must prepare for the worst.”
Backing Prime Minister Narendra Modi’s recent appeal to reduce unnecessary fuel use, overseas travel and non-essential gold purchases, Kotak said countries must avoid “living beyond their means” during periods of uncertainty.
“There are some simple things that a country can do, which is to moderate unnecessary consumption,” he said, adding that nations should manage finances carefully, much like maintaining a balance sheet.
Middle-class families may face pressure
Kotak said lower and middle-income families could face the biggest strain once fuel costs start rising. According to him, the impact will not be limited to petrol and diesel prices, but will also increase the cost of transportation, goods and everyday services.
“The consumers have not felt the pressure at all,” he said, warning that families with limited incomes may soon have to spend more both directly on fuel and indirectly on daily essentials linked to transport and supply chains.
“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 added.
India vulnerable because of oil imports
Kotak said India remains highly exposed to global oil price shocks because the country imports more than 85 per cent of its crude oil requirements. He noted that India’s current account deficit stays manageable when crude prices remain around $60 per barrel. However, if prices rise closer to $100 a barrel due to tensions in West Asia, the country could face far greater pressure on inflation, the rupee and overall economic stability.
Global oil markets have remained volatile amid fears of disruption in supplies through the Strait of Hormuz and uncertainty around the fragile US-Iran ceasefire.