CII Proposes Comprehensive 20-Point Strategy to Mitigate West Asia Crisis Impact on Indian Businesses
The Confederation of Indian Industry (CII) has unveiled a detailed 20-point action plan aimed at safeguarding Indian companies from the adverse effects of the ongoing West Asia crisis. This initiative includes critical measures such as tax and duty adjustments for energy inputs, customs waivers for liquefied natural gas (LNG), and exemptions on long-term capital gains tax for primary market investments to enhance foreign capital inflows.
Leveraging Covid-Era Tools for Current Challenges
Drawing inspiration from strategies implemented during the Covid-19 pandemic, the industry body has called for a government-guaranteed credit line scheme, a three-month loan moratorium, and a special refinance window specifically for micro, small, and medium enterprises (MSMEs) and other sectors severely impacted by the crisis.
Chandrajit Banerjee, Director General of CII, emphasized, "India's experience during previous crises has demonstrated that coordinated fiscal and monetary actions can substantially bolster resilience. The next phase of policy response should prioritize targeted liquidity support, credit facilitation, trade cost management, and foreign exchange stability."
Key Recommendations for Government and RBI
The industry chamber has urged the Finance Ministry and the Reserve Bank of India (RBI) to extend delivery timelines for public sector undertaking (PSU) contracts by three to four months, without enforcing Liquidated Damages clauses. Additionally, it advocates for reductions in performance guarantees and security deposits.
Further proposals include expanding the Trade Receivables Discounting System (TReDS) platform across affected industrial clusters to streamline invoice discounting, expediting pending GST refunds, duty drawback claims, and RoDTEP dues. CII also recommends introducing accelerated depreciation benefits on capital goods and establishing a special forex swap window for oil and gas PSUs to meet their operational needs.
Establishing a Proactive Economic Framework
Looking ahead, CII has proposed the creation of a standing Economic Shock Response Framework with pre-agreed triggers to ensure swift and effective action during future crises, enhancing India's economic preparedness and stability.
