Uday Kotak calls US plan to 'rent' Hormuz as return to colonialism

As tensions escalate in the Middle East amid Donald Trump’s deadline, Uday Kotak at the FICCI Foundation Day
called the US proposal to “rent” the Strait of Hormuz a form of colonialism.

"I'm just repeating facts from the speech of Donald Trump in the White House. He made two points which clearly identified that we are in a very different world. One, he said, whoever wins the war, keeps the spoils.
And two, if we get control of the Strait of Hormuz, we, the United States of America, will charge a rent. You are getting back to a world of true colonialism. And it reminds me, especially on this occasion, to how the British took control of India," said Kotak during a FICCI event.


"And at this point of time, from a business and economics point of view, I see two possible scenarios coming into play at this point of time. The first is a scenario of what I call as the world post 1945. For the last 80 years, between 1945 to 2026, whenever there has been a crisis, we have seen a reversion to mean now whether that reversion happens in one day, one week, one month, three months, one year. But every crisis is an opportunity for business, industry and finance to take the downturn as a positive. Because sooner or later, you will see reversion to mean this is the history of the world for the last 80 years," said Kotak.

"So this is scenario one. Scenario two, which is a scenario of thousands of years prior to 1945, is that whenever there is a crisis, there is a structural change happening in the world. And we have seen it time and again, lands conquered, rulers changed, fight between the church and the state, the fight between continents, the fight between small countries versus large, but in general, the world prior to 1945 was extremely tribal," added Kotak.

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How will it impact the world?

Kotak has warned that any possibility of structural change could have a dramatic impact on the world.

"If you go by the recent history, the probability of scenario one is extremely high. And you may decide whether it's 50%, 60%, 80%, 90%. But even a 10 to 20% probability of scenario two changes the equations dramatically. Therefore, even if it is a low probability event, it's a very high impact event. And therefore, in our business, we are all going on a fundamental base case assumption that it is scenario one. But my submission here is, whatever low probability you put to scenario two, do not assume that to be zero, that we could be in the middle of a structural change of a kind we have not seen, at least in our living history," said Kotak.

Uday Kotak urges India Inc to invest in R&D

While addressing the possible outcome of the businesses, Kotak also urged the India Inc to start investing in Research and Development to achieve aatmanirbhatra ambitions.

“As business communities, we must factor in assumption two of structural change. If we believe in Aatmanirbhar Bharat, we need to examine the gaps.," said Kotak. “First, how much are we spending from profits on R&D? We can get rare earths from China, Microsoft and other technology from the US, but where is India? We are outstanding in trade and services, but what have we converted into products? We have developed monopolies even in raw materials.”

Trump's threats loom

Trump has warned that unless Tehran allows free passage through the strategic oil chokepoint by midnight GMT Tuesday, the United States will unleash what he called the "complete demolition" of Iran's critical infrastructure.

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"We have a plan... where every bridge in Iran will be decimated by 12 o'clock tomorrow night, where every power plant in Iran will be out of business, burning, exploding and never to be used again," Trump said, brushing aside accusations such strikes would constitute war crimes.

"I mean complete demolition by 12 o'clock, and it'll happen over a period of four hours -- if we wanted to," Trump said at a press conference during which he also recounted the rescue of the two crew members of a US F-15 fighter jet shot down over Iran last week.

The Iranian army's Khatam Al-Anbiya central command, responding to Trump's threats, called him "delusional" and said "crushing operations of the warriors of Islam against the American and Zionist enemies" would continue.

Fighting raged across the region overnight, with Israel's military saying Tuesday it carried out a new "wave" of air strikes on what it called Iranian "terror regime infrastructure" in Tehran and other areas.

Iranian media said explosions were heard in parts of Tehran and nearby Karaj early Tuesday.

The Israeli army later said it had detected missiles launched from Iran towards Israeli territory, adding that air defence systems were working to intercept them.

Across the Gulf, Bahrain's interior ministry said air-raid sirens sounded Tuesday morning, urging residents to seek shelter, while the United Arab Emirates said its air defences were actively engaging missiles and drones.

Saudi Arabia's defence ministry said its air defences intercepted and destroyed seven ballistic missiles launched towards the kingdom's east, with debris falling near energy facilities.