New Delhi, April 7 -- The ongoing geopolitical tensions, particularly the West Asia conflict, are expected to impact India's financial services sector through deeper, layered effects over time, according to an analysis by EY.

The report stated that the road ahead for India's financial sector will be shaped less by the cumulative impact of sustained geopolitical and macroeconomic stress. Early signs of stress, such as elongated supply chains, rising cost pressures, and tightening liquidity across value chains, are already visible.

It stated, "While the second-order pressure could unfold in margin compression, deferred investments, and stretched working-capital cycles, third-order stress will transmit via ecosystem payment strain and sele...