The US–Israel strikes on Iran that began on February 27, 2026, have triggered a chain reaction that goes well beyond geopolitics. For Indian business owners, the effects are arriving fast — in the form of rising fuel costs, a weaker rupee, volatile input prices, and nervous investor sentiment. As your Chartered Accountants, we want to cut through the noise and give you a clear picture of what is happening, which parts of your business are at risk, and the concrete steps you can take today.

01

The Crude Oil Crisis & Its Direct Impact on Your Business

Brent crude has surged above $116 per barrel — a jump of over 25% in just two weeks. India imports roughly 85–90% of its oil, which means this shock travels directly into your cost structure. If your business uses transport, logistics, diesel generators, or any petrochemical inputs, you are already feeling this.

⚡ What You Should Do Now

  • Review all vendor contracts — identify which ones have fuel-linked escalation clauses that may trigger automatically
  • Revisit your delivery and logistics costs — renegotiate if possible or factor higher freight into Q1 projections
  • If you operate vehicles, update your Travel & Car Usage Reimbursement Policy immediately to reflect new fuel rates
  • For manufacturing businesses — check if your raw material suppliers are already raising prices citing crude cost; get written quotes locked before they revise
CA Note on GST: If your input costs rise significantly, your working capital tied up in GST credit cycles will feel the squeeze. Higher purchase values mean higher GST outflows before you recover it. Review your GST cash flow cycle with your CA — this is particularly critical for businesses on monthly filing.
02

Rupee Depreciation: The Hidden Tax on Your Business

The Indian rupee has touched ₹92 against the US dollar — an all-time low. For businesses with any foreign currency exposure, this is a critical moment. Even businesses that do not directly import or export may be indirectly affected through their supply chain.

🔴 High-Risk Businesses

  • Importers of raw materials or goods
  • Businesses with foreign currency loans (ECB)
  • Companies paying software licenses or SaaS in USD
  • Travel agencies with foreign hotel/airline bookings
  • Anyone with unhedged forex payables

🟢 Lower-Risk / Benefiting

  • IT and software exporters billing in USD
  • BPO / KPO companies with dollar revenue
  • Businesses with INR-only supply chains
  • Domestic-focused service businesses

⚡ What You Should Do Now

  • List all foreign currency obligations due in the next 90 days — payables, loan EMIs, software subscriptions
  • Speak to your bank about forward contracts or hedging options to lock in a rate before further rupee decline
  • If you have an ECB (External Commercial Borrowing), calculate the increased INR repayment amount at ₹92 and factor it into your cash flow
  • Review any agreements where pricing is indexed to USD and update your customer contracts accordingly
03

GST, Compliance & Audit: Stay Ahead While Others Panic

Market disruptions often create compliance oversights. Business owners scrambling to manage operations can miss GST filing deadlines, let working capital reconciliations slip, or make errors in expense claims under changed conditions. This is also a time when tax authorities increase scrutiny of anomalies in filings.

⚡ What You Should Do Now

  • Do not delay your March GST filings — penalties and interest compound quickly even in crisis months
  • If you're claiming higher fuel or transport costs, ensure supporting documentation is in order — bills, e-way bills, and vendor GST numbers must all match
  • War-related price increases in your purchase invoices are legitimate — but GST credit can only be claimed on valid tax invoices; ensure your vendors are compliant
  • If your sales are dropping due to the crisis, file nil or lower returns promptly rather than delaying — late fees are avoidable costs
04

Working Capital & Cash Flow: The Immediate Priority

In a volatile environment, cash is king. The combination of higher input costs, slower collections (as your customers too are cautious), and tighter credit conditions means working capital strain is likely to intensify over the next 4–8 weeks. This is the time to proactively manage your cash position — not react to it.

⚡ What You Should Do Now

  • Prepare a 60-day rolling cash flow forecast immediately — know your inflows and outflows week by week
  • Accelerate collections: send statements to overdue customers now, before they too tighten their outflows
  • Talk to your bank proactively about existing CC/OD limits — better to expand limits before you need them than to seek emergency credit during a crisis
  • Defer non-critical capital expenditures — conserve cash until the geopolitical situation stabilises
  • If your business has inventory, monitor it carefully — panic buying or hoarding of raw materials at inflated prices can trap working capital
05

For Listed Companies & Those with Investors: Disclosures Matter

If your company is listed, or you have investors, shareholders, or lenders who receive financial reporting, the impact of this crisis on your business must be proactively disclosed. SEBI has been increasing scrutiny on timely and accurate disclosures.

⚡ What You Should Do Now

  • If crude oil or forex exposure materially affects your Q4 results, prepare a management commentary explaining the impact
  • Review your annual report assumptions — if revenue or margin projections were made before February 27, they may need revision
  • Ensure your auditors are briefed on these developments if your March 31 audit is approaching
  • For companies with bank covenants tied to financial ratios, check if rising costs could breach thresholds and communicate with banks early
06

The Opportunity Side: What Smart Businesses Are Doing

Not everything about this situation is negative. Disruption creates opportunity — if you act with clarity while others are reacting emotionally.

💡 Strategic Moves Worth Considering

  • Energy transition acceleration: Businesses that switch to solar or renewable energy sources will be insulated from future crude price shocks. The economics of solar have never been more compelling — our Solar vs Wind comparison guide has detailed ROI data
  • Supplier diversification: If you rely on a single import source affected by the conflict, now is the time to identify and qualify alternative suppliers
  • Pricing review: If your competitors are absorbing rising costs without adjusting prices, they are building a problem. A well-reasoned price revision communicated clearly to customers is better than a margin squeeze
  • IT and services export: If you have the capability to offer services internationally, a rupee at ₹92 means your USD-priced services are significantly more attractive to foreign buyers
In Summary

Six Things Every Business Owner Should Do This Week

  • Review all contracts with fuel/logistics cost components and renegotiate or update
  • Map your foreign currency exposure for the next 90 days and consider hedging
  • Prepare a 60-day cash flow forecast and identify pinch points
  • Ensure March GST filing is on time and documentation is clean
  • Talk to your bank proactively about credit lines before you need them urgently
  • Defer non-critical capex and hold more cash through the volatility period

The businesses that come out strongest from periods like this are not the ones that were lucky — they are the ones that acted early, stayed compliant, and made decisions based on numbers rather than headlines.

Need Help Navigating This for Your Business?

Our team at R. Mahesh & Associates is available to review your business's exposure to the current crisis and help you take the right steps. No obligation — just a conversation.

Schedule a Free Consultation