How Indian CEOs are resetting strategy amid geopolitical fragmentation

Geopolitical risk is now part of strategy, scaling AI and selective dealmaking.

In brief

• Geopolitical risk for CEOs is reshaping the boardroom agenda as they prioritize disciplined growth and profitability amid structural global uncertainty.
• AI focus is shifting from adoption to enterprise impact as 78% of Indian CEOs increase AI spend from 2025 investment levels. However, regulation and skills gaps threaten to slow progress.
• Dealmaking is becoming a strategic business transformation accelerator, as CEOs use M&A and strategic alliances to strengthen AI and technology capabilities. 

Over the past few quarters, nearly every CEO conversation has been starting with the same acknowledgment: uncertainty is no longer a passing phase, it is the operating context. Geopolitical uncertainty, supply chain reconfiguration, regulatory divergence and technology disruption are not episodic shocks to be managed and moved past. They are structural features of today’s global economy and central to CEO decision-making.

The latest EY‑Parthenon CEO Outlook Survey, which captures the outlook of 50 Indian CEOs across sectors including Consumer, Health, Infrastructure, Financial Services and TMT, reinforces the fact that Indian CEOs, like their global peers, are recalibrating strategy by being more disciplined, selective and intentional in where and how they grow.

Geopolitics moves from peripheral risk to core strategy

Geopolitical risk for CEOs has moved to the top of the agenda. More than six in 10 Indian CEOs now identify it as the most significant risk over the next 12 months. In addition to the level of concern, the risks are more tangible. Energy price shocks, trade disruptions and regulatory unpredictability are directly affecting cost structures, capital allocation and operating models.

CEOs are embedding geopolitical risk explicitly into strategy formulation and investment decisions. In practice, this means moving away from efficiency led models built for lowest cost toward resilience led strategies designed for volatility. Enterprises are redesigning supply chains with diversification and buffers in mind. Capital deployment is becoming more targeted. Success is increasingly measured in terms of sustainable business growth rather than speed of expansion.

CEOs are favoring more but nimble moves over large, one time bets. For example, forming strategic alliances instead of pursuing full acquisitions, testing markets before scaling, and deploying AI selectively to reduce downside risk, accelerate learning and preserving flexibility.

Disciplined growth replaces scale-at-all-cost

A clear majority of CEOs now prioritize sustainable, long‑term growth with a visible path to profitability. After a decade characterized by abundant capital and growth narratives, CEOs are anchoring ambition in financial discipline and operational clarity. Technology, and AI in particular, sits at the center of this equation.

The discipline is visible in four areas:

• Sharper portfolio choices, i.e., deciding where to lean in and where to simplify
• Renewed focus on productivity, driven by technology
• Increased attention to talent quality and leadership depth
• Financial flexibility; maintaining balance sheet strength to act decisively when opportunities arise

AI enterprise impact and talent strategy

The boardroom conversation has moved from “whether” to adopt AI to how CEOs are using AI for business transformation. Nearly one‑third of CEOs now see tangible enterprise impact of AI adoption across innovation, operations, strategy and customer experience, which reinforces further investment: 82% CEOs indicated optimism for their company’s investment plans in emerging technologies.

What matters most is AI embedded into core workflows. Organizations that are using AI to accelerate decision making, improve foresight and rewire how work gets done—not just to automate tasks at the margins—are seeing early gains.

However, fragmented and evolving regulatory frameworks are emerging as a constraint. In the survey, 38% CEOs felt AI regulatory frameworks are increasing compliance and operational complexity, while 42% cite fragmentation and the evolving nature of regulation as a barrier to scaling AI effectively. 

The nature of work and leadership is also changing as roles get redesigned to combine human judgment with machine intelligence. Reskilling and upskilling are moving from HR initiatives to core business priorities and organizational structures are being simplified so that decision rights sit closer to where insights are generated.

Transactions as a lever for long-term transformation

CEOs continue to see transactions as critical lever for transformation and growth, but with a sharper focus on strategic fit and capability building rather than on scale. India’s position as a leading destination for planned deal activity reflects confidence in its long term fundamentals and its role in global supply chains and digital capability. Nearly 58% of respondents planning to pursue M&A said they expect their own deal appetite to increase over the next 12 months, even as dealmaking becomes more selective. India has emerged as the primary destination for planned M&A activity, followed by China, Singapore, the US and South Africa.

Over the coming year, CEOs are expected to prioritize collaborative transaction strategies, with greater emphasis on strategic alliances and partnerships, 

The defining feature of today’s CEO agenda is acceptance of uncertainty and systematically navigating instability. Leaders who pull ahead would be able to translate uncertainty into clarity in where to invest, how to deploy AI at scale, how to redesign work around human judgment, and how to reshape portfolios for the future.