Kotak warns of ‘return of colonialism’, urges India Inc to bet on innovation and manufacturing

MUMBAI: Uday Kotak on Tuesday warned that the world is “at a very important cusp of the return of global colonialism… in 2026 we are at one such cusp,” drawing parallels between historical imperial expansion and current geopolitical shifts, while urging India Inc to reset its approach to innovation, manufacturing and energy security.

Speaking at the FICCI foundation day event, Kotak said the fact that we are at this cusp was very clear last night in US President Donald Trump’s speech in the White House. “He made two points. One, he said whoever wins the war keeps the spoils, and two, if the US gets control of the Straits of Hormuz, it will charge a rent. You are getting back to a world of true colonialism,”said Kotak.

According to Kotak, the global balance of power is shifting towards a few dominant nations. “At this stage there are at least three powers with significant leverage over others… one is US, second is China and third rising because of geopolitics may be even Russia,” he said, adding that these developments point to a world increasingly shaped by power rather than rules.

He compared the present moment with the rise of British colonial rule in India, highlighting how technological superiority drove expansion. “In the early stages, the East India Company was a pure trading company… then they had a superior technology—of guns and gunpowder… this technology gave them leverage,” he said, explaining how trade eventually turned into territorial control.

“Through that you saw a trading company become the British Empire in India,” he added, cautioning that similar patterns may now be re-emerging in different forms.

Kotak also flagged changing assumptions around global safe havens, particularly in the Middle East. “We have assumed that many cities in the Middle East are safe… are we beginning to re-examine our assumption,” he said, noting that investors who moved for “safer, sounder and tax efficient” environments may now need to reassess those decisions.

Kotak called for higher spending on innovation, warning that “we believe we can buy technology… but where is the Atmanirbhar Bharat truly,” and urged IT firms to shift from services to products, noting that “hardly any of them move to ‘productise’ themselves.”

He stressed prioritising national interest in areas like energy, asked “how are we going to put country first,” flagged a $116 bn trade deficit with China, and highlighted the gap in mid-sized manufacturing “between Rs 100 crore to Rs 1,000 crore.”

Calling this a turning point, he said, “we have to capture this opportunity with a sense of paranoia and purpose.”

He framed the current situation as a choice between cyclical recovery and structural disruption, warning businesses against ignoring tail risks.

“Even if it is a low probability event it is a high impact event… whatever low probability you put to scenario two do not put it to zero,” he said, referring to the possibility of a structural break from the post-1945 global order.
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