economy
India launches credit plan for small businesses and airlines hit by Middle East crisis
India has approved a plan to support small businesses and airlines hit by the Middle East conflict, enabling fresh credit and loan guarantees
TL;DR
- India introduces ECLGS 5.0 with a $2 billion capital allocation to support businesses affected by the Middle East conflict.
- The scheme is expected to enable an additional $3.5 billion in credit flow.
- Passenger airline companies have a borrowing cap of $160 million.
- Loans for the airline sector will have a seven-year tenor with a two-year moratorium.
- Loans for other businesses will have a five-year tenor with a one-year moratorium.
- The initiative aims to maintain operations, supply chains, and protect jobs.
- The guarantees will be managed by the National Credit Guarantee Trustee Company Ltd.
- The conflict has led to supply disruptions, higher inflation risks, and slower growth for India, a major oil importer.
- Indian airlines sought government aid due to surging jet fuel prices, with over 15,400 flights canceled between February 28 and April 24.
- Moody's has lowered India's GDP projection for FY2026-27 due to subdued private consumption and industrial activity.