India’s federal cabinet has approved a ₹181 billion ($1.9 billion) credit guarantee scheme to support businesses and airlines affected by the war in Iran. The government will back additional lending through sovereign guarantees, aiming to help companies stay operational, safeguard jobs, and keep supply chains running.
The program mirrors the emergency credit support introduced during the Covid-19 crisis, when over 11 million guarantees worth ₹2.42 trillion were issued to micro, small, and medium enterprises.
Officials say the Middle East conflict is disrupting global trade and hitting India particularly hard due to its heavy dependence on imported energy. India is the world’s third-largest oil consumer and sources around 90% of its gas from the region, raising concerns that the impact could rival the pandemic-era shock.
While the government maintains its growth outlook for the coming fiscal years, some economists have already lowered projections, citing rising risks. Estimates from major institutions suggest slower GDP growth ahead as global instability weighs on the economy.
