Time-bound conflict-linked Emergency Credit Line Guarantee Scheme similar to the one during the pandemic, rationalisation of the tax and duty structure on energy inputs, and extending delivery timelines for Central and state PSU contracts are some suggestions made to the finance ministry by the industry in light of the ongoing West Asia crisis.
The Confederation of Indian Industry (CII) has suggested a 20-point policy agenda to the government, calling for a fiscal, financial and trade response to the current geopolitical situation, as MSME exporters and energy-intensive industries continue to bear the brunt of the crisis.
“India’s experience during previous crises has shown that coordinated fiscal and monetary action can significantly strengthen resilience. The next phase of policy response may therefore need to focus on targeted liquidity support, credit facilitation, trade cost management and foreign exchange stability,” said Chandrajit Banerjee, director general, CII.
The industry chamber has recommended that additional collateral-free working capital be extended to affected enterprises through government-backed guarantees, particularly targeting MSMEs, exporters and gas-dependent sectors.
CII has suggested that the Reserve Bank of India should consider a temporary and clearly defined three-month moratorium and restructuring window, and a special refinance window for MSMEs, especially exporters and ancillary units linked to export supply chains, in light of the crisis.
It has also sought temporary relief in electricity tariffs to help manage rising input costs during the disruption period, and a temporary reduction or waiver of administrative banking charges, including loan processing fees, foreign exchange handling charges and documentation costs.
The finance ministry, CII said, could also consider a time-bound rationalisation of the tax and duty structure on energy inputs to mitigate cascading cost impacts of the disruption, including a temporary waiver of the 2.5 per cent customs duty on LNG imports.
The government, on March 27, had announced a mega bonanza for oil companies, cutting additional excise duty on petrol and diesel by ₹10 per litre in order to protect consumers from price rises. The government reintroduced export duties on diesel and aviation turbine fuel (ATF) to ensure adequate availability of these fuels in the domestic market. A duty of ₹21.5 per litre has been levied on diesel exports, while ATF exports will attract a duty of ₹29.5 per litre from nil.
On April 2, 2026, the finance ministry announced a full customs duty exemption on critical petrochemical products in response to the continuing conflict in West Asia.
The industry chamber has suggested a special foreign exchange (forex) swap window may be considered for oil and gas public sector undertakings (PSUs), enabling them to meet their US dollar requirements in a manner that reduces volatility in the foreign exchange market and limits undue pressure on reserves.
“Over the medium term, a permanent Conflict-Linked Export Risk Support Facility may be established within the Export Credit Guarantee Corporation (ECGC), with predefined activation criteria and standardised support parameters to provide timely risk coverage during geopolitical disruptions,” CII recommended.
CII had earlier written to the MSME secretary to highlight significant disruptions in shipping and logistics operations due to evolving geopolitical developments in the Middle East.
Seeking support for the MSME sector through alternate sourcing of raw materials, clarity on gas supply availability, and temporary waiver or relief on port storage, the industry chamber had stressed several emerging concerns relating to logistic disruptions, rising freight and insurance costs, and working capital stress among MSMEs due to the geopolitical developments in West Asia.
In its latest statement, CII said that the government should expand the Trade Receivables Discounting System (TReDS) platform more actively across affected industrial clusters to facilitate invoice discounting, and settle pending GST refunds, duty drawback claims and RoDTEP dues on a fast-track basis.
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