The recent conflict between India and Pakistan, triggered by the Pahalgam terrorist attack on April 22, 2025, has had significant implications for businesses and policy in India.
Below are the key areas of impact that companies should anticipate:
1. Increased Focus on Cybersecurity
The geopolitical tensions have led to a surge in cyberattacks targeting Indian businesses, particularly in critical sectors like BFSI (banking, financial services and insurance), IT and critical infrastructure. Large and mid-sized companies in India are reassessing their cyber readiness and investing in security upgradation.
Companies are now prioritizing cybersecurity as a boardroom issue:
- Heightened Cyber Threats: SCS Tech, an IT and cybersecurity solutions provider, have reported a 30–40% surge in enterprise enquiries related to geopolitical cyber risks, which cuts across government and private sectors. This includes threats like ransomware, distributed denial-of-service (DDoS) attacks and supply chain vulnerabilities.
- Accelerated Investments in Cybersecurity: Organizations are fast-tracking cybersecurity upgrades, enhancing monitoring systems with turnaround times for signing contracts and implementing solutions shrinking from years to months. Additional measures include proactively focusing on simulation drills and educating holders on cyber hygiene. For example, edtech firms are focusing on protecting personal data and trust in their platforms.
2. Privacy and Data Protection
The rise in cyberattacks has highlighted vulnerabilities in data protection frameworks.
Any regional turmoil could create a complex environment where privacy and data protection are at heightened risk. Governments would need to carefully balance security needs with the protection of individual rights, while also addressing the challenges of cybersecurity and data breaches.
International cooperation and clear legal frameworks would be essential to ensure that data protection principles are upheld even during times of conflict.
- Heightened Surveillance: Governments may implement increased surveillance measures, such as monitoring internet traffic and communications, to gather intelligence and counter potential threats. This could lead to data protection sensitivities and privacy concerns.
- Consumer Data Risks: Sectors that manage vast repositories of personal data are increasingly vulnerable. Companies would now be prioritizing privacy measures to safeguard user’s trust and comply with evolving regulations.
- Policy Implications: The government may push for stricter data protection laws and enforcement to address these vulnerabilities.
3. Supply Chain and Trade Disruptions
The conflict has created uncertainty in the region, which could disrupt supply chains and trade:
- Business Impact: The conflict has led to a decline in business and trade confidence in the region. Disruptions include operational impacts such as production delays, inventory shortages, financial losses and customer dissatisfaction.
- Global Supply Chain Impact: The region’s instability has impacted global supply chains, particularly for industries reliant on cross-border trade or raw materials sourced from South Asia. Key effects include halted trade, rerouted shipping and air routes, increased costs and delays in delivery, particularly for time-sensitive goods. This negatively influences various industries, including textiles, pharmaceuticals and agricultural products.
4. Policy Changes in Procurement and Defense
The conflict has prompted the Indian government to reassess its procurement policies, particularly in defense and critical infrastructure:
- Defense Procurement: The conflict has likely accelerated defense modernization efforts, with a focus on indigenous production and reducing reliance on foreign suppliers. This aligns with India’s broader “Atmanirbhar Bharat” (self-reliant India) initiative.
- Public Procurement Policies: While specific changes in public procurement policies are not yet reported, the government may introduce stricter guidelines to ensure resilience against geopolitical risks. There is a shift towards fostering collaborations between public and private sector entities, to acquire technology, manufacturing processes and research and development capabilities.
5. Long-Term Geopolitical Risk Management
The conflict has underscored the need for businesses to incorporate geopolitical risks into their continuity planning:
- Business Continuity: Companies are now preparing for scenarios involving geopolitical conflicts, in addition to natural disasters. This includes reassessing supply chain dependencies and diversifying operations to maintain business continuity.
- Cross-Sector Impact: While critical sectors like BFSI and defense are the primary targets, even consumer-facing industries like edtech are being affected, indicating the broad scope of these risks.
Looking Ahead
The recent India-Pakistan conflict has acted as a wake-up call for Indian businesses and policymakers. Companies should anticipate:
- Increased investments in cybersecurity and data protection;
- Potential disruptions in supply chains and trade;
- Policy shifts in procurement and defense to enhance resilience;
- A broader focus on geopolitical risk management in business continuity planning;
- A shift toward self-reliance and reduced dependence on imports from adversarial nations;
- Strengthening of bilateral trade agreements with friendly nations;
- Diversification of trade partnerships to mitigate geopolitical risks; and
- Further deterioration of regional trade cooperation under SAARC.
By proactively addressing these challenges, businesses can mitigate risks and adapt to the evolving geopolitical landscape.
