The Confederation of All India Traders (CAIT) on Monday urged the government to implement credit and liquidity-supportive measures, especially for MSMEs over concerns of the ongoing West Asia crisis impacting India’s trade and industry.

The association called for extension and relaxation of loan repayments for MSMEs and small traders and launch of a special Credit Guarantee Line Scheme to support liquidity.

Further, it requested interest subvention for severely impacted sectors, close monitoring and stabilisation of fuel and raw material prices and freight, insurance support, and faster refunds for exporters, according to an official statement.

The conflict could particularly impact small businesses and MSMEs and the government should take timely precautionary and relief measures, Member of Parliament and Secretary General Praveen Khandelwal said in a letter to Finance Minister Nirmala Sitharaman.

Khandelwal also strongly recommended the constitution of a 'West Asia Impact Assessment & Response Task Force', comprising representatives from key ministries, RBI, trade bodies, and sectoral experts, to continuously assess the evolving situation and recommend timely policy interventions.

He cited increasing concern about rising input costs, working capital stress, supply chain disruptions, margin pressures, and increased financial burden on businesses, particularly MSMEs.

He lauded the proactive leadership of Prime Minister Narendra Modi, adding that his constant supervision and timely interventions have ensured resilience of India’s supply chains despite global uncertainties, the letter said.

Khandelwal lauded the government's strategic steps such as diversification of sourcing, strengthening of logistics infrastructure, prudent fiscal management, and close monitoring of essential commodities.

These steps helped maintain stability in availability and prices, instilling confidence across the trade and industry ecosystem, the industry body said in a release.

West Asian tensions could lead to rising crude oil prices, supply disruptions, and cost escalations, impacting sectors including petrochemicals, pharmaceuticals, plastics, textiles, fertilisers, chemicals, auto components, logistics, and other energy-intensive industries, CAIT National President B.C. Bhartia said.

Exporters may face higher freight and insurance costs, shipment delays, route diversions, and payment uncertainties, impacting global competitiveness, he added.