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Supply chain and logistics disruptions are emerging as key risks for India Inc amid escalating West Asia tensions, CII President Rajiv Memani told CNBC-TV18, warning that the ongoing geopolitical crisis is beginning to impact businesses across sectors.
With oil prices climbing above $100 a barrel and global markets on edge, Memani said the situation is “a really serious issue” for both industry and the government, with early signs of stress already visible. “It is starting to have an impact in different ways—whether it is raw material, the entire supply chain ecosystem that is shaking right now, or logistics issues, which are equally big and very concerning,” he said.
The comments come against the backdrop of rising fears of a broader macroeconomic fallout, including risks to India’s FY27 growth outlook, a widening trade deficit and pressure on the current account, as flagged by policymakers.
Memani emphasised that the government has been proactive and closely engaged with industry as the situation evolves. “The government has been very engaged with industry on a very regular basis… the government and industry are completely in sync,” he noted, adding that the speed of response has been encouraging.
He outlined that immediate discussions are centred on mitigating near-term disruptions, including challenges around logistics, financing and availability of critical inputs such as gas and feedstock. At the same time, there is a parallel focus on cushioning vulnerable sectors and ensuring continuity in operations.
Beyond the immediate crisis, Memani highlighted emerging macro pressures from elevated energy imports and currency volatility. “The current account deficit is growing because of energy imports… remittances and foreign direct investments will be challenged,” he said, pointing to broader risks to fiscal space as well.
Also Read | CEA: West Asia crisis to hit India’s growth; clearer FY27 outlook likely after Apr-May
He added that policymakers and industry are also working on longer-term strategies to convert the crisis into an opportunity, including accelerating domestic manufacturing, sustaining private investment momentum and identifying areas to attract foreign capital.
“The focus is on managing both demand and supply,” Memani said, adding that the government is acting “almost on a daily basis” as the situation remains fluid.
He also indicated that the disruption could fast-track India’s energy transition efforts. “There will be acceleration in transitioning to energy sources where India has greater control,” he said, citing areas such as compressed biogas, ethanol and renewables as part of the broader response strategy.
With oil prices climbing above $100 a barrel and global markets on edge, Memani said the situation is “a really serious issue” for both industry and the government, with early signs of stress already visible. “It is starting to have an impact in different ways—whether it is raw material, the entire supply chain ecosystem that is shaking right now, or logistics issues, which are equally big and very concerning,” he said.
The comments come against the backdrop of rising fears of a broader macroeconomic fallout, including risks to India’s FY27 growth outlook, a widening trade deficit and pressure on the current account, as flagged by policymakers.
Memani emphasised that the government has been proactive and closely engaged with industry as the situation evolves. “The government has been very engaged with industry on a very regular basis… the government and industry are completely in sync,” he noted, adding that the speed of response has been encouraging.
He outlined that immediate discussions are centred on mitigating near-term disruptions, including challenges around logistics, financing and availability of critical inputs such as gas and feedstock. At the same time, there is a parallel focus on cushioning vulnerable sectors and ensuring continuity in operations.
Beyond the immediate crisis, Memani highlighted emerging macro pressures from elevated energy imports and currency volatility. “The current account deficit is growing because of energy imports… remittances and foreign direct investments will be challenged,” he said, pointing to broader risks to fiscal space as well.
Also Read | CEA: West Asia crisis to hit India’s growth; clearer FY27 outlook likely after Apr-May
He added that policymakers and industry are also working on longer-term strategies to convert the crisis into an opportunity, including accelerating domestic manufacturing, sustaining private investment momentum and identifying areas to attract foreign capital.
“The focus is on managing both demand and supply,” Memani said, adding that the government is acting “almost on a daily basis” as the situation remains fluid.
He also indicated that the disruption could fast-track India’s energy transition efforts. “There will be acceleration in transitioning to energy sources where India has greater control,” he said, citing areas such as compressed biogas, ethanol and renewables as part of the broader response strategy.
