At a time of rising geopolitical uncertainty and fears of an energy-price shock from the ongoing Middle East conflict, Uday Kotak on Tuesday urged India Inc and policymakers to prepare for “rough weather”, warning that the impact of higher fuel prices is yet to fully hit Indian consumers.
Speaking at the CII Annual Business Summit 2026, Kotak said India must prepare itself for economic shocks before they arrive rather than react after the damage is done.
“I would like India to assume we will be in rough weather and prepare to do very well in rough weather. Men and women and strength are not built in good weather,” Kotak said during the session.
He warned that India has not yet fully experienced the impact of the recent surge in global energy prices triggered by tensions in the Middle East, but said the transmission of higher oil prices into the domestic economy was inevitable.
“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, and consumers have not felt the pressure at all,” he said.
Explaining the likely impact on households, Kotak said consumers with limited incomes would face a double blow as fuel costs rise directly and also push up prices of other goods dependent on transportation and energy inputs.
“The shock is coming. Oil companies had the ability to be the shock absorber, and it’s a large amount of money,” he said, adding that the situation could improve only if geopolitical tensions ease quickly.
Kotak also highlighted the growing role of domestic investors in India’s economy, contrasting it with foreign capital flows. According to him, while foreign investors have invested roughly ₹1.5 trillion, domestic investors including retail participants and insurance companies have invested nearly ₹80 trillion into the economy.
In a strong endorsement of India’s retail investing boom, Kotak described systematic investment plans (SIPs) and mutual funds as the country’s most important macroeconomic stabilisers.“The most important macroeconomist of India today is not what any of us think he is. The most important macroeconomist of India today is Mr Rohit Sharma — mutual funds sahi hai,” he remarked.Kotak said India had historically depended excessively on foreign equity capital but mutual funds had helped channel domestic household savings into equities, creating a more stable pool of risk capital.“We have got domestic savings into equities. Society, government and business have an obligation to make sure that mutual funds truly remain sahi,” he said.During the discussion, Kotak also called for greater debate on the role and efficiency of state-owned enterprises, citing examples from China and Singapore, where several globally competitive firms remain state-controlled.“State-owned enterprises are not necessarily the wrong thing,” he said, pointing to India’s digital public infrastructure such as Unique Identification Authority of India’s Aadhaar as an example of successful public-sector-led innovation.He also advocated a gradual opening up of pension and insurance funds towards private equity and venture capital investments, arguing that India needs deeper pools of long-term domestic capital to support innovation and entrepreneurship.