Navigating the West Asia Situation

Executive Summary Nearly half of firms view the ceasefire as high-risk and fragile ; few expect genuine stabilisation, and are instead preparing for months of unresolved conflict.

Nearly 2x as many manufacturing as services companies (56% vs 30%) say they are moderately-to-highly-exposed to West Asia and the present crisis.

Larger businesses (revenues >Rs 5,000 crores) appear to be more highly exposed , presumably due to their deeper international trade linkages.

Supply-side pressures (rising input costs and logistics disruptions) are already biting, with a second wave of demand uncertainty building and expected to intensify.

A clear hierarchy of concerns places cost pressures and supply chain disruptions at the top; operational and policy risks remain more peripheral for most firms.

Planned organisational responses span issues such as repricing , supply chain diversification and investment hold-backs , reflecting broad uncertainty rather than decisive strategic shifts.

. A ceasefire in West Asia has temporarily paused hostilities, easing immediate concerns around potential escalation and continued market disruption. However, the underlying risks remain intact. Recent developments indicate that while active conflict may have subsided, a renewed flare-up cannot be written off. For businesses, this creates a complex, uncertain environment, where supply chains, energy and financial markets remain vulnerable to sudden shocks. The situation, therefore, is best characterised not as a resolution but as a fragile interlude, warranting continued caution and scenario-based preparedness.

Against this backdrop, IMA India surveyed firms across sectors to understand they are reading and responding to the situation. The survey explored how companies characterise the conflict, how exposed they are to it, and which areas of their business they expect to bear the brunt. It also sought to capture the channels through which the conflict is already being felt, how firms expect conditions to evolve in the near-to-mid-term and the actions they are taking in response.

The findings, based on ~125 responses from across sectors, paint a cautious picture. The mood across respondents is one of watchfulness rather than alarm but the breadth of concern is notable, cutting across commodity prices, logistics, demand conditions and financial markets.

. The mood is cautious at best. Nearly half of firms view the ceasefire as fragile and high-risk, while another third see de-escalation as incomplete and uncertain. Only a small minority believe the situation is genuinely stabilising, reflecting a broad consensus that the conflict will remain unresolved for months if not longer.

. Exposure varies significantly by business type and size. Manufacturing firms report nearly twice the moderate-to-high exposure of their services counterparts (56% vs 30%), reflecting greater dependence on physical supply chains, raw material imports and energy-intensive production.

Exposure to West Asia rises with scale. Businesses with revenues above Rs 5,000 crores report the highest rates of moderate-to-high exposure (45%), likely owing to greater international trade linkages and cross-border operations. Smaller firms (< Rs 500 crores), while less directly exposed, are not insulated as nearly a third report some degree of meaningful exposure.

. The conflict appears to be hitting businesses in two waves. Supply-side pressures with higher input costs and logistics disruptions are already biting, but a second wave is building: demand uncertainty is increasingly front of mind and firms expect it to intensify over the coming months.

. A clear hierarchy of concerns emerges across ten business dimensions. Commodity prices, cost pressures and supply chains form the sharp end of the threat. Operational and policy risks, by contrast, remain more peripheral for most companies.

. No single response measure dominates. Firms are taking different routes, whether repricing, diversifying supply chains or holding back on investment. The spread reflects a wait-and-watch approach in the face of ongoing uncertainty.