India Inc remains resilient despite the uncertainty created by the ongoing West Asia conflict, but inflation risks linked to energy prices and supply chains require close monitoring, senior leaders of the Confederation of Indian Industry (CII) said in an interview with CNBC-TV18.The comments come as the Reserve Bank of India’s latest annual report projected that the Indian economy would remain resilient, with inflation in 2026–27 likely to stay aligned with the target. At the same time, the central bank echoed concerns raised by Chief Economic Adviser V. Anantha Nageswaran, warning that a prolonged conflict could pose downside risks to growth.
Chandrajit Banerjee, Director General of CII, said businesses should prepare for a prolonged period of global uncertainty even if the conflict sees a near-term resolution.
“We should be prepared for navigating through this, with or without the conflict, for quite a few months to come,” Banerjee told CNBC-TV18.Banerjee said inflation remains the most immediate concern, especially through the energy channel. Higher fuel prices, he noted, have wider implications through freight costs, industrial raw materials and packaging expenses, with smaller businesses particularly vulnerable.“A sustained increase in crude oil prices would have a measurable inflationary impact. I would think every $10 per barrel could easily add about 30 basis points,” he said.He cautioned against panic responses or open-ended subsidies, arguing instead for targeted and time-bound measures to protect vulnerable households, MSMEs and essential supply chains.“The first priority should be to prevent this from becoming a broader domestic price shock,” Banerjee said, adding that inflation management was no longer only a monetary issue but also one involving energy security, logistics and agricultural resilience.CII President R Mukundan struck a more optimistic tone on India’s ability to weather the disruption, saying Indian industry and the government were working together to manage short-term pressures while preparing for longer-term changes.Mukundan said businesses were planning across multiple horizons, with immediate measures aimed at the next three to six months and medium-term preparation extending up to 18 months.“What is in our favour is our proximity to the Middle East. Because of being so close to the Middle East, we will be the first and the fastest to recover from this as the situation normalises,” he added.
He said India’s established economic ties with the region, combined with coordinated government action, would support recovery once geopolitical tensions eased.Mukundan also pointed to structural reforms and changes in India’s energy mix as part of the longer-term response. “The long-term solution, of course, is rapid electrification and rapid change in our energy mix,” he said.On inflation and food security, Mukundan said the government had adequate policy tools and buffer stocks to manage pressure, even as concerns around monsoon conditions and El Niño remained under watch. He said India had developed a practical playbook to deal with such disruptions.“We have a playbook for this as a country, and I am sure it will be implemented district by district in a very micro way,” Mukundan said.Kartikeya Dube, Co-Chairman of the CII Hydrocarbon Panel and Chairman of BP India, said recent fuel price increases and government intervention were helping ease pressure on oil marketing companies while protecting consumers.“The price increases will help with the losses,” Dube said, referring to under-recoveries faced by oil marketing companies. He also highlighted the government’s excise duty reduction, describing the ₹10 cut as “a massive contribution”.Dube said reports of panic buying and long queues at fuel stations were isolated and manageable, with the ministry and industry maintaining close oversight of supplies.“There will be these one-offs, but the supply chain and availability of product are working at their best,” he said.He added that the crisis had accelerated several medium- and long-term energy reforms, including storage expansion, electric vehicle adoption and upstream sector reforms.Also Read | India’s economy has taken many hits. Why hasn’t it cracked?India Inc has continued to show resilience despite the ripple effects of the West Asia conflict clouding the global economy. The RBI’s annual report similarly noted that geopolitical risks have re-emerged as a dominant drag on global growth in 2026, even as domestic macroeconomic fundamentals remain relatively strong.For CII, however, resilience alone will not be enough. Banerjee said domestic demand remains India’s key strength and called for stronger support for MSMEs through timely payments, inflation control and confidence-building measures.“This is also a moment to push reforms,” he said. “We should see investments moving through and reforms that may have been delayed now being rolled out.”
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