‘The biggest shock is yet to come…’, warns Uday Kotak, country’s problems may increase due to expensive oil

Uday Kotak Warning Economic Fallout: Amid the ongoing conflict in West Asia, billionaire banker Uday Kotak has warned that India may soon have to face economic consequences in the coming weeks, especially through rising energy costs. America, Israel and Iran are involved in this conflict.

Speaking at CII’s annual Business Summit 2026, the Kotak Mahindra Bank founder said the impact of rising oil prices has not yet fully reached Indian consumers, but he warned that the situation could worsen in the coming months.

India has not yet felt the full impact of the crisis – Kotak

Uday Kotak said, the impact of the Middle East war in the last two months has not been visible in terms of changes in energy prices. It’s coming and it’s going to be huge. Existing fuel reserves are cushioning the immediate impact, which is why households have not yet felt any major increase in costs.

However, he said this pressure will ultimately be reflected in fuel prices and the cost of everyday goods and services. Consumers have not felt the pressure at all so far, and said that if inflation rises further, low- and middle-income families may face the most difficulties.

Kotak’s warning to middle-class families

Kotak also highlighted how fuel prices impact household budgets indirectly through transportation and supply chain costs. He warned that think about the consumer who has limited income, who has to spend more directly on fuel and indirectly on other things dependent on fuel. This shock is coming.

His comments come amid concerns of volatility in global fuel markets due to tensions in West Asia and uncertainty over the fragile US-Iran ceasefire. Fears of disruption to oil supplies through the strategically important Strait of Hormuz have already pushed up crude oil prices. Also, the Indian Rupee has weakened against the US Dollar and there has been huge volatility in the stock markets.

Countries should be more cautious: Uday Kotak

The banker also warned that India cannot remain in the comfort zone at a time of rising global uncertainty and geopolitical tensions. As the world becomes increasingly fragmented and protectionist, countries must become more alert and strategically prepared. I believe that we should be prepared for extreme caution even before the event. We should be prepared for the worst situation.

Highlighting India’s dependence on imported crude oil, Kotak said the economy remains vulnerable to external shocks. India imports more than 85 percent of its oil needs, making it vulnerable to fluctuations in global energy prices; These fluctuations can have an impact on inflation, rupee and overall economic stability.

The country may have to face more economic pressure

He further said that when crude oil prices remain around $60 per barrel, India’s current account deficit remains under control. However, if oil prices rise to close to $100 per barrel, the country may face much greater economic pressure.

Kotak made these comments when Prime Minister Narendra Modi urged people to reduce fuel consumption, avoid unnecessary foreign travel and postpone non-essential gold purchases amid growing global uncertainty. Supporting this broader message, Kotak said that countries should avoid spending beyond their means during uncertain economic conditions. There are some simple measures that any country can take, such as controlling unnecessary consumption, and stressed that countries should carefully assess their financial position, just like one maintains one’s balance sheet.

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