(MENAFN- KNN India) New Delhi, Oct 14 (KNN) Industry bodies representing micro, small, and medium enterprises (MSMEs) have appealed to the Reserve Bank of India (RBI) to consider extending the Emergency Credit Line Guarantee Scheme (ECLGS) and introducing a more transparent and standardised lending framework to strengthen the resilience of small businesses.

The proposal was discussed at a meeting convened last week by the RBI's Financial Inclusion and Development Department, which aimed to address challenges faced by MSMEs due to the impact of 50 percent US tariffs on certain exports, according to Business Standard.

The meeting was chaired by RBI Executive Director Neeraj Nigam and included representatives from key industry associations, such as the India SME Forum, Laghu Udyog Bharati, Dalit Indian Chamber of Commerce and Industry, Madhya Pradesh Small Scale Industries Association, Coimbatore District Small Industries Association, Karnataka Small Scale Industries Association, and the All India Association of Industries.

Leading banks, including State Bank of India, Punjab National Bank, HDFC Bank, Axis Bank, and Kotak Mahindra Bank, along with representatives from the Indian Banks' Association (IBA), also participated in the discussions.

Speaking at the meeting, Sushma Morthania, Director General, India SME Forum and President, Women Entrepreneurs Forum, highlighted that MSMEs in critical sectors such as textiles, pharmaceuticals, agriculture, and gems and jewellery are facing severe cash flow disruptions due to sudden tariff shocks.

She warned that these disruptions risk pushing fundamentally viable enterprises into default if timely financial support is not provided.

The industry representatives emphasized the need for a robust, standardized lending framework and timely extensions of credit support schemes to ensure that MSMEs continue to contribute to India's economic growth while navigating global trade uncertainties.

(KNN Bureau)

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