This latest iteration of the scheme, approved by the Union Cabinet, seeks to provide substantial credit guarantees for micro, small, and medium enterprises (MSMEs) and airlines facing financial strain. The initiative promises a comprehensive 100% credit guarantee for MSMEs and 90% for non-MSMEs and airlines, thereby aiming to alleviate some of the liquidity challenges exacerbated by the ongoing West Asia crisis.

According to documents from the National Credit Guarantee Trustee Company Limited (NCGTC), eligible borrowers under this scheme include existing MSMEs, non-MSMEs with current working capital limits, and scheduled passenger airlines that maintained standard accounts as of March 31, 2026. This broad eligibility is intended to ensure that various sectors can access necessary funds.

Key elements of the scheme include:

• A total additional credit flow target of Rs.2,55,000 crore, which includes Rs.5,000 crore specifically allocated for airlines.
• The guarantee fee for participating in this scheme is nil, making it more accessible for businesses.
• For MSMEs, additional credit support is capped at 20% of peak working capital utilized during Q4 FY26, up to Rs.100 crore.
• The additional credit limit for airlines can reach up to Rs.1,500 crore, contingent upon specific conditions.
• The loan tenure spans five years with a one-year moratorium for MSMEs and non-MSMEs; airlines will have a seven-year tenure with a two-year moratorium.
• This scheme applies to all loans sanctioned from the date of issue of guidelines by NCGTC until March 31, 2027.

Pallavi Shrivastava further emphasized the importance of timely access to working capital: “What really matters in such moments is timely access to working capital and the 100% guarantee structure helps unlock that by giving lenders the confidence to move faster.”

This initiative not only aims to sustain business operations but also seeks to protect jobs and maintain supply chains during these uncertain times. As global economic conditions fluctuate due to ongoing conflicts in West Asia, such measures may prove vital in stabilizing affected sectors.

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On March 23, 2026, Prime Minister Narendra Modi delivered a significant address in the Lok Sabha concerning the escalating conflict in West Asia, which has been intensifying for over three weeks. The Prime Minister highlighted the worrisome situation, noting that External Affairs Minister Dr. S. Jaishankar and Union Minister Hardeep Puri had briefed the House on the developments.

During his address, Modi chaired a high-level meeting of the Cabinet Committee on Security to deliberate on the implications of the West Asia crisis for India. He emphasized that the ongoing war has introduced unforeseen challenges, impacting economic stability, national security, and humanitarian efforts.

In response to these challenges, Modi instructed ministers to form dedicated groups aimed at tackling the emerging issues stemming from the crisis. The government is actively managing supply challenges, particularly those arising from disruptions around the Strait of Hormuz, a critical shipping route for oil.

As part of its strategic response, India currently holds approximately 53 lakh metric tonnes of strategic petroleum reserves, with plans to expand this capacity to 65 lakh metric tonnes. This move is crucial as India diversifies its crude oil import sources, now procuring from 41 countries, up from 27 previously.

Modi reassured the nation that the supply of liquefied petroleum gas (LPG) for domestic use remains a top priority for the government, even as domestic production has seen significant increases over the years. He stated, “LPG supply for domestic use continues to be the government’s top focus, even as production within the country has increased over the years.”

Despite the heightened tensions in the region, Modi noted that several shipments have continued to reach India via the Hormuz route in recent days, indicating a resilient supply chain amidst the crisis. He remarked, “India is procuring petroleum and gas from multiple global sources, keeping a close watch on key shipping routes, including those in the Gulf region.”

The Prime Minister’s address underscores the government’s proactive approach to managing the multifaceted challenges posed by the West Asia conflict. As the situation evolves, the implications for India’s economy and security will be closely monitored by both the government and the public.

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