The World Through 2029

Executive Summary Risk comes in two forms, and each requires a different response. In an upturn, the dominant risk is underinvestment . In a downturn, the dominant risk is overextension .

A ‘managed disorder’ scenario is the central forecast today, and it runs through 2029 at a minimum.

In this managed disorder scenario, oil will hold in the $70–90 range with elevated volatility. Escalation, particularly a Hormuz disruption, could push prices toward $110–130.

A potential Taiwan crisis might begin with a naval blockade , sealing the island off and disrupting semiconductor supply chains that underpin global manufacturing.

For Indian businesses, a managed disorder scenario will mean persistent imported inflation, interest rate pressures and annual rupee depreciation of ~4% .

. The rules-based international order constructed after WWII is giving way to a world of negotiated access to markets, technology, energy and security in which no single power sets the terms. What matters most for businesses today is knowing which risks dominate, and repositioning accordingly before the ‘music’ stops. Adit Jain, Editorial Director, IMA India mapped the three scenarios most likely to define the world through 2029 — managed disorder, escalating fragmentation and uneasy accommodation — and unpack what each implies for the Middle East, Europe, America and China. He examined how these forces transmit directly onto Indian corporate balance sheets, from the rupee and energy costs to capital flows and trade, and what it means for how CEOs should reposition their organisations across the cycle.

Cycle Risk as the CEO's Central Task Risk comes in two forms, and each requires a different response. In an upturn, the dominant risk is underinvestment. Capacity takes 18-36 months to build, and businesses that fail to commit early will cede market share to competitors who do. Everything downstream, be it talent, distribution or channel relationships, follows from lost market share – which is really the hardest consequence to reverse. In a downturn, the dominant risk is overextension. The instinct to slash costs uniformly, particularly when driven by an HQ mandate disconnected from local market conditions, removes the wrong people and creates precisely the environment that sends high performers elsewhere.

Goldman Sachs offers the most striking example of how to steady the ship during a downturn. Leading up to the 2007 Global Financial Crisis, the bank's leadership stayed ahead of the pack by listening carefully for signs of ebbing investor excitement. It moved decisively to liquidate bond positions before the rest of the market grasped what was happening. Being first, being smart and being willing to ignore the conventional wisdom proved to be three decisive variables. However, it is important to remember that the right strategy in one cycle is consistently the wrong strategy in another, and companies that navigate successfully are those that shed the previous guidelines early enough to write a new one.

From Rules to Free-Fall: The New Order The next business cycle will not be shaped by demand conditions or interest rates. Instead, armed conflict, sanctions, tariffs, energy-supply disruptions and political misalignment will be the dominant variables to consider over the next 3-5 years. The geopolitical system is moving from a stable, American-anchored framework to one of managed disorder. Conflicts persist in Ukraine, West Asia and the Taiwan Strait, but so far, the major powers involved continue to pull back before the situation goes entirely out of hand.

A ‘managed disorder’ scenario is the central forecast today, and it runs through 2029 at a minimum. No fundamental realignment is possible before a change in the American administration, and even the November midterms will not materially shift the US foreign policy equation. The White House retains full authority over trade enforcement, sanctions, immigration regulation and the bulk of what constitutes foreign policy regardless of how the Congressional elections go.

Gulf Endgames and the Energy Variable In the Gulf, there are four possible scenarios that might play out: armed containment, which remains the most probable; a negotiated security bargain, in which nuclear and maritime arrangements are restored to minimum predictability; wider regional escalation; and internal regime stress. The regime change scenario is more plausible in Bahrain (a Sunni monarchy governing a majority Shia population) than in Iran, where American pressure has done what it consistently does: shore up the regime by giving the population something to rally against.

In this managed disorder scenario, oil will hold in the $70–90 range with elevated volatility. Escalation, particularly a Hormuz disruption, could push prices toward $110–130; a 5% supply shortfall would produce a price response far exceeding 5% because of how thin the market's elasticity runs under conditions of physical scarcity. Shipping insurance, route-length premiums and trade cost inflation will have a compounding effect on prices.

China: Stabilisation, Excess Capacity and Taiwan The base case for China is one of gradual stabilisation. While property prices will remain stressed, and construction activity will be constrained, at a broad level, the system will hold. A more immediate concern is excess capacity. With domestic demand having collapsed in the property bust, Chinese manufacturers are dumping chemicals, ships, cars and electronics across the globe. In turn, this has triggered retaliatory tariffs that will lead to further, worldwide supply chain reorganisation. India's manufacturing sector, particularly the mid-sized MSME exporters in fabricated components and industrial goods, has begun to see the first real inbound interest from American companies looking to reduce their China and Vietnam exposure. However, this presents a narrow window of opportunity, and one that will reward companies that have quietly built up capacity, rather than those scrambling to develop it overnight.

A potential Taiwan crisis might begin with a naval blockade, sealing the island off and disrupting semiconductor supply chains that underpin global manufacturing. This would force the question of whether America will deploy the Seventh Fleet. China's exposure to the US treasury market is a vulnerability, but at the same time, China has a choke-hold over pharmaceutical precursor supplies. Its capacity to redirect bulk drug exports would produce immediate and severe disruption. China has chosen, so far, not to use these instruments, because the act of restraint is itself a form of leverage.

India's Horizon: Rupee, Inflation and Corporate Exposure For Indian businesses, a managed disorder scenario will mean persistent imported inflation, interest rate pressures and annual rupee depreciation of ~4%. The exchange rate is likely to drift towards 112/$ by 2029 in the base case, and closer to 123/$ under an escalatory scenario. Yet, unlike in the past, today it is capital outflows, not the current account deficit, that is driving down the rupee. Notably, this has turned India's overall balance of payments position negative after a long gap. The rupee, in other words, is now being weakened by the exit of patient capital, which no longer finds the Indian market as attractive as it once did.

India’s deepening relationship with the UAE provides oil supply assurance rather than any price advantage. Its strategic value lies both in the assurance of supply, and in its signalling to Riyadh. Russia remains India's primary military partner by default. The $30 bn debt owed to Russia for oil imports cannot be settled in dollars under the current sanctions, which in turn is forcing a renminbi-mediated workaround that carries its own political and financial costs. Against this backdrop, India will look to recalibrate its economic relationship with China for strategic reasons, including by permitting certain Chinese manufacturing investments. Its dependency on China for its pharmaceutical supply chains, in particular, makes continued estrangement unsustainable.

Geopolitical instability is not a new phenomenon in terms of corporate planning, but it has become the primary variable rather than a side issue. CXOs who continue to plan around demand, interest rates and capacity alone will find themselves consistently surprised by the sequence in which events unfold. Those who instead build geopolitical risk assessment into cycle analysis as a first-order input will be better positioned to make early calls, whether on fresh investments, cost cutting, or measures to protect market share.