While praising “the series of timely, well calibrated, and coordinated measures” that have already been implemented in response to the global uncertainty brought by the West Asia conflict, the top industry group CII on Sunday requested further monetary and fiscal policy concessions from the government and the RBI to overcome it.

“The Government and the RBI have reacted with speed, clarity, and coordination,” said Chandrajit Banerjee, director general of the CII. India’s policy framework is resilient and responsive to external shocks, as shown by the early steps taken to calm mood.

Simultaneously, CII noted that the situation is still changing, with underlying supply-side constraints in the energy, logistics, and trade sectors continuing beyond the initial phase. According to industry feedback, the initial set of policy actions has lessened the immediate effects, but several industries, notably MSMEs, exporters, and energy-intensive ones, are still experiencing operational and financial challenges.

Banerjee stated that “India’s experience during past crises has demonstrated that coordinated fiscal and monetary action can greatly increase resilience. ” The next stage of the policy response may thus need to prioritize trade cost management, targeted liquidity assistance, credit facilitation, and exchange rate stability.

The Finance Ministry has been urged by CII to introduce a time-bound Conflict-Linked Emergency Credit Line Guarantee Scheme (CL-ECLGS) that is modeled after the Emergency Credit Line Guarantee Scheme (ECLGS) that was implemented during the epidemic. Through government-backed guarantees, the CL-ECLGS would provide more collateral-free working capital to impacted businesses, with a focus on MSMEs, exporters, and gas-dependent industries.

Additionally, it has requested the RBI to think about a brief, well-defined three-month moratorium and restructuring window for MSMEs, particularly those engaged in exports and ancillary operations connected to export supply chains.

The CII statement states that the RBI may establish a Special Refinance Window for MSMEs and other impacted sectors, along with focused liquidity assistance via tools like Targeted Long Term Repo Operations (TLTRO), allowing banks and non-banking financial companies (NBFCs) to continue providing credit to productive industries at a fair cost.

Additionally, it said that the Ministry of Finance, in collaboration with the RBI, could offer industry—particularly MSMEs—immediate contractual and operational assistance by extending delivery timelines for Central and State PSU contracts by 3–4 months without triggering Liquidated Damages clauses, and by lowering Performance Bank Guarantee and Security Deposit requirements to minimal levels to alleviate liquidity problems. To help manage increasing input costs during the interruption time, temporary reductions in electricity rates may also be made available.

Additionally, CII has proposed that, in deserving cases, banks be given the power to reevaluate and improve working capital restrictions for a short period of time, especially for gas-dependent, export-oriented enterprises that are experiencing transient distress. A calibrated increase in cash credit limits of up to 20%, together with soft lending conditions throughout the interruption, would give significant operational relief.

It has requested a brief decrease or waiver of administrative banking expenses, such as loan processing costs, foreign exchange management fees, and documentation expenses, which could be taken into account for MSMEs and impacted industries.

Additional items on the CII wish list include a time-bound rationalization of the tax and duty system on energy inputs to lessen the cascading cost consequences of the interruption, accelerated depreciation benefits on capital goods, and that the Trade Receivables Discounting System (TReDS) platform may be more actively expanded across affected industrial clusters.