India Electronics and Semiconductor Association (IESA) has welcomed the Union Cabinet’s approval of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, describing it as a significant policy measure to strengthen India’s electronics manufacturing and semiconductor ecosystem. The scheme provides 100% credit guarantee coverage for micro, small and medium enterprises (MSMEs), along with zero guarantee fees and enhanced access to working capital. According to the industry body, these measures will help ease liquidity pressures and support business continuity amid ongoing global supply chain disruptions and geopolitical uncertainty.
MSMEs form a critical foundation of India’s electronics sector, contributing extensively across component manufacturing, electronics manufacturing services, repair and refurbishment activities, semiconductor supply chains, tooling, materials, and design-led innovation. The sector also plays a key role in employment generation, localisation, and strengthening supply chain resilience.
IESA noted that MSMEs account for a substantial portion of India’s industrial and economic output, including a significant share of manufacturing, exports, and national employment. In the electronics domain, these enterprises represent the majority of operational units and are central to India’s efforts to build a self-reliant and globally competitive manufacturing base.
Ashok Chandak, President of IESA, stated that the timely introduction of ECLGS 5.0 reflects strong policy support for the MSME segment. He noted that electronics MSMEs are deeply integrated into supply chains spanning components, semiconductor-related services, materials, and design functions. He added that collateral-free and fully guaranteed credit access will help these enterprises maintain operations, safeguard employment, and continue investing in capacity expansion and technology upgrades.
The association highlighted that access to stable working capital is especially important for the electronics and semiconductor industry, where inventory cycles are long and supply chain continuity is essential. ECLGS 5.0 is expected to strengthen financial stability for smaller suppliers and enable faster integration into global value chains. It is also expected to support localisation efforts and reinforce India’s broader ambition of developing a large-scale electronics manufacturing ecosystem.
IESA further stated that the scheme complements ongoing government initiatives such as the India Semiconductor Mission, the Electronics Component Manufacturing Scheme, Production Linked Incentive (PLI) schemes, and broader Make in India programmes. These initiatives collectively aim to expand domestic manufacturing capacity while improving competitiveness and investment attractiveness.
