Bengaluru, May 6: The India Electronics and Semiconductor Association (IESA), the apex industry body representing the ESDM sector, welcomes the Union Cabinet’s approval of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. The scheme’s 100% credit guarantee support for MSMEs, zero guarantee fee, and additional working capital access will provide critical liquidity support to businesses navigating global supply chain and geopolitical disruptions.
MSMEs form the backbone of India’s electronics manufacturing ecosystem, accounting for a significant share of component manufacturing, EMS, repair and refurbishment services, semiconductor supply chains, tooling, materials, and design-led innovation. Almost 75% of applications for recent highly impactful ECMS scheme were from MSME sector. MSMEs contribute nearly 30% to India’s GDP, around 35% of manufacturing output, over 45% of exports, and employ more than 32 crore people nationwide. In the electronics sector as well, MSMEs constitute a large majority of industry units and play a critical role in localisation, employment generation, and supply chain resilience, commented, Ashok Chandak, President of IESA.
“IESA thanks the Government of India for the timely approval of ECLGS 5.0. MSMEs are the backbone of India’s electronics and semiconductor ecosystem, supporting the sector across manufacturing, components, semiconductor supply chains, repair economy, materials, and design services. This collateral-free and fully guaranteed credit support will help MSMEs maintain operations, protect jobs, strengthen supply chain resilience, and continue investments in growth and technology upgradation,” said , Ashok Chandak, President of IESA.
For the electronics and semiconductor sector, where supply chain continuity, inventory cycles, and working capital are critical, ECLGS 5.0 comes as a major confidence booster. It will particularly help Tier-2 and Tier-3 suppliers integrate faster into global value chains, support localisation, and accelerate India’s ambition of building a $500 billion electronics manufacturing ecosystem.”
IESA further noted that the scheme complements ongoing initiatives such as theIndia Semiconductor Mission, Electronics Component Manufacturing Scheme (ECMS), PLI, and broader Make in India efforts by improving credit access for smaller enterprises that form the foundation of the electronics manufacturing ecosystem. The Union Budget 2026-27 proposed a three-pronged approach to help Indian Micro, Small & Medium Enterprises (MSMEs) grow as Champions by providing equity, liquidity and professional support to MSMEs.
The one-year moratorium and extended loan tenure will also support MSMEs in scaling capacities, improving competitiveness, and accelerating domestic value addition.
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