India is preparing to roll out an emergency credit support package of around Rs 4,000 crore for domestic airlines, in a rare intervention aimed at easing financial stress caused by operational disruptions linked to the ongoing tensions in Iran and rising aviation fuel costs.
According to media reports, the proposed scheme will allow the government to extend sovereign guarantees for loans of up to Rs 1,000 crore per airline. Carriers may also be eligible for an additional Rs 500 crore in borrowing, provided promoters infuse an equivalent amount into their respective companies.
Officials indicated that the sovereign guarantee framework is intended to act as a facilitator rather than a direct lending mechanism, with financial institutions retaining full authority over credit decisions. “Lenders will do their own due diligence before providing the loan,” an official familiar with the discussions was quoted as saying.
The move forms part of a broader plan by the finance ministry to extend credit guarantees on loans worth USD 26.7 billion, targeting sectors impacted by global volatility, including smaller businesses affected by geopolitical disruptions.
15/04/2026 Business World
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