The central government might soon unveil a targeted support package for sectors hit hardest by trade disruptions due to the US-Iran war, according to an NDTV report citing a government source. The proposed
measures are said to be part of a larger Rs 2.5 lakh crore credit-support framework being explored under the Emergency Credit Line Guarantee Scheme (ECLGS).
One of the key proposals under discussion is a dedicated financing window for airlines worth around Rs 5,000 crore, the report said. Carriers may be allowed to borrow through a sovereign-backed ECLGS channel, with lending limits of up to Rs 1,000 crore for each airline. Officials are also examining a five-year tenure for the facility, with scope for continuation if required.
The report further said the Centre could provide credit guarantees covering as much as 90 per cent of the sanctioned amount, aimed at improving lenders’ willingness to extend loans during the current uncertainty.
The ECLGS was originally introduced in 2020 during the COVID-19 period to help businesses facing cash-flow stress. It enabled eligible borrowers to raise collateral-free loans backed by government guarantees, while benefiting from capped borrowing costs and easier repayment structures.
The government had already announced certain relaxations for exporters earlier this year. In March, the Central Board of Indirect Taxes and Customs (CBIC) rolled out relief steps to help businesses dealing with the impact of the Middle East crisis.
Equity markets have also reflected concerns over the geopolitical shock. According to the report, more than 400 stocks recorded double-digit declines in March. Pressure has been visible across oil-linked companies, airlines, auto makers, textile firms, manufacturers, banks, financial companies, consumer businesses and logistics players.
Separately, Iran has reportedly conveyed a fresh proposal to the United States through Pakistani intermediaries for reopening the Strait of Hormuz, according to Axios, as cited in the report.
The waterway is crucial for global crude movement and especially important for India, which relies heavily on imported energy. Any blockage or prolonged disruption can raise oil and jet fuel costs, hurting airline profitability and increasing costs across the broader economy.
