4 min readMumbaiMay 12, 2026 04:08 PM IST
First published on: May 12, 2026 at 04:08 PM IST
At a time when the global economy is shifting from globalisation to an increasingly ‘tribal’ order, countries need to be prepared for structural changes to the global economic order even if the conflict between the US and Iran is resolved, according to Uday Kotak, founder and former CEO of Kotak Mahindra Bank, adding that Indian companies must also focus on the long-term betterment of the nation instead of just quarterly profits.
While the world economy has historically boomed after major global crises, the past 80 years or so have not seen a structural shift, with economies instead reverting to a normalised ‘mean’ in the wake of such crises during this period, Kotak said on Tuesday. However, there always remains a chance that the current US-Iran war may lead to a lasting structural shift, for which we need to be prepared.
“…even if the probability of going back to mean is high, are we saying that a structural change probability is zero? I don’t think so,” said Kotak while speaking at the Confederation of Indian Industry’s annual business summit in New Delhi. The world is increasingly returning to the tribal mindset seen before 1945, with a focus on territory, ownership, and monetising assets, which might lead to these structural changes, he said. Meanwhile, with intangible assets such as AI, we are living in a world where control over both tangible and intangible assets is concentrated in a few hands. Thus, India needs to focus on preparing itself for this changed geopolitical environment, even as people in the country haven’t yet fully felt the impact of the war in West Asia due to oil companies so far bearing the brunt of higher fuel costs.
“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. Oil companies had the ability to be the shock absorber, and it’s a large amount of money,” said Kotak.
To prepare ourselves, India needs to have a prudent balance sheet, with companies focusing on the long-term betterment of the nation instead of just profits. “The balance sheet of a country needs to get much stronger, and the ability to generate revenues by a country through its resources or its companies, will determine the destiny of each country,” Kotak said. The government also needs to let businesses die naturally, instead of always stepping in to protect them as “creative destruction creates future opportunity”. Kotak went on to cite an example from the US, which had allowed many of its major energy companies to die in its journey towards being self-sufficient in meeting its energy requirements during the 1970s and is now a global superpower with some of the most powerful companies.
India Inc also needs to step up alongside the government, Kotak said, pointing out that while the government manages the fiscal deficit and its foreign exchange reserves, companies need to take responsibility to improve and manage the country’s profit and loss account. He went on to state that India Inc had financialised too early, with excessive focus on quarter-to-quarter profitability.
“The ability to take a 3-5 year view is significantly required, and is missing. I therefore would strongly urge companies to not be excessively focused on the short-term stock price, on the ESOP vesting, or the money that people will make, and think about building a company 3-5 years forward,” Kotak said.
Uday Kotak, founder and former CEO of Kotak Mahindra Bank. (File Photo) 
Share
