The Indian government has launched a major new financial support plan, the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, to help businesses struggling amid the ongoing crisis in the Middle East. With a budget of ₹18,100 crore ($1.9 billion), the programme specifically targets small and medium enterprises (SMEs) that are facing financial challenges and supply chain disruptions due to the conflict between Israel and Iran.
Businesses in sectors like textiles and glass manufacturing are being hit these days, and as a major oil importer, India is also facing the threat of inflation and slower economic growth. To get some relief from this pressure, the government is offering a 100% guarantee for loans taken by small firms and 90% guarantee for big companies and the airline industry.
Under this offer, eligible small businesses can borrow additional money based on their credit limits as of March 2026. Most companies can raise up to 20% of their peak working capital, with a limit of ₹100 crore. The airline sector receives even more support with the ability to borrow ₹15 billion per borrower.
The payment terms are very simple, as businesses have to pay back the money in a time period of 5 years, including a 1-year break, where only the interest is paid, and the airlines get a time period of 7 years with a 2-year break. This initiative is handled by the National Credit Guarantee Trustee Company, which aims to inject a total of ₹255 billion into the economy.
Also Read- Reliance Ramps Up LPG to Help India Amid Iran Conflict
By providing these kinds of services, the government hopes to help companies keep running, protect millions of jobs and make sure that vital supply chains remain functional during this period of global instability. The scheme will remain open for loan approvals until March 31, 2027.
