New Delhi, April 5: The Confederation of Indian Industry (CII), the country’s leading industrial body, has called for enhanced fiscal and monetary support for industries to navigate the uncertainty caused by the ongoing crisis related to the Iran conflict.
CII has also acknowledged the government’s efforts to address this issue thus far.
CII Director General Chandrajit Banerjee stated, “The government and the RBI have acted swiftly, with clarity and coordination. Initial measures have helped stabilize market sentiment, proving that India’s policy framework is both sensitive and resilient to external shocks.”
Furthermore, CII noted that the situation is continuously evolving, with supply-side pressures in energy, logistics, and trade channels persisting beyond the initial phases. Feedback from the industry indicates that while the first round of policy measures may have mitigated immediate impacts, many sectors are still facing operational and financial stress.
Banerjee added, “India’s experience during past crises shows that coordinated fiscal and monetary actions can significantly enhance resilience. Therefore, the next phase of policy response may need to focus on targeted liquidity support, credit facilities, trade cost management, and foreign exchange stability.”
CII has requested the Finance Ministry to initiate a time-bound conflict-related emergency credit guarantee scheme (CL-ECLGS), similar to the Emergency Credit Line Guarantee Scheme (ECLGS) implemented during the pandemic. This would provide additional working capital to affected enterprises, particularly targeting MSMEs, exporters, and sectors reliant on gas.
Additionally, CII urged the RBI to consider a three-month temporary and clearly defined moratorium and restructuring window for small and medium enterprises (MSMEs), especially those linked to export supply chains.
According to CII’s statement, the RBI could introduce a special refinancing window for MSMEs and other affected sectors, along with targeted long-term repo operations (TLTRO) to provide liquidity support, enabling banks and non-banking financial companies (NBFCs) to continue lending to productive sectors at reasonable costs.
It further stated that the Finance Ministry, in collaboration with the RBI, could extend the contract delivery timelines for central and state public sector enterprises by 3-4 months without applying liquidated damages clauses, thus providing immediate contractual and operational relief to industries, especially MSMEs. Additionally, it could minimize performance bank guarantee and security deposit requirements to alleviate liquidity shortages. Temporary relief in electricity rates could also be offered to help manage rising input costs during the disruption period.
Moreover, CII suggested that banks be allowed to reassess and increase working capital limits for eligible cases for a limited period, particularly for export-oriented and gas-dependent units facing temporary crises. A phased increase of up to 20% in cash credit limits with concessional loan terms during the disruption period would provide significant operational relief.
CII has also called for a temporary reduction or waiver of administrative banking fees, including loan processing fees, foreign exchange management fees, and documentation costs for MSMEs and affected sectors.
Other demands from CII include a more active expansion of the Trade Receivables Discounting System (TReDS) platform for impacted industrial groups, timely rationalization of tax and fee structures on energy inputs to mitigate cost impacts due to disruptions, and accelerated depreciation benefits on capital goods.
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