New Delhi: Industry body, the Confederation of Indian Industry (CII) has suggested a strategic five-point action agenda in response to the geopolitical instability in the West Asia.
According to the CII, the objective of the suggestions is to strengthen the Indian economy against the external shocks.
Central to the proposal is a phased drawdown of central excise cuts on fuel and a voluntary energy conservation compact to manage energy security.
Furthermore, the agenda prioritises the liquidity of smaller enterprises through a 45-day MSME payment guarantee and emphasizes structural self-reliance via supply-chain ringfencing and aggressive import substitution, and a front-loading of private capex coupled with voluntary price restraint and a stepped-up internship intake.
Going further, the CII has appealed to industry to step forward and shoulder its share of the national burden during the ongoing period of global stress.
Setting out the five-point agenda for the duration of the West Asia crisis and beyond, Chandrajit Banerjee, Director General, CII said, “Taken together, these five suggestions could add up to industry’s concrete partnership offer to the Government in recent memory.”
“A calibrated phased restoration of the fuel excise will progressively relieve the exchequer of a very substantial burden without disrupting consumer sentiment, and industry is prepared to absorb a meaningful share of input cost pressures within its own margins,” he added.
Banerjee further added that a voluntary energy conservation compact will lock in a 3 to 5 per cent saving in fuel and power consumption across participating companies, every barrel saved at the factory gate being a barrel less the country has to import. Similarly, a 45-day MSME payment guarantee, backed by aggressive use of TReDS and supply-chain finance, is the single most powerful contribution larger corporates can make to MSME resilience right now, he added.
"Combined with deeper supply-chain ringfencing, a front-loading of FY27 investments and a scale-up of internship intake under the PMIS, this is industry’s way of saying that we will lean in, not pull back, at this defining moment for the Indian economy,” the CII added.
Elaborating on the appeal by CII, outlined the following measures:
Phased Drawdown of the Fuel Excise Cut
The Rs 10 per litre central excise cut on petrol and diesel, taken at significant cost to the exchequer, should be progressively rolled back in tranches over six to nine months as crude prices stabilise.
Voluntary Industry Energy Conservation Compact
Member companies may like to commit to a 3 to 5 per cent reduction in fuel and power consumption over the next two quarters through process optimisation, efficient logistics, fleet electrification and accelerated renewable power purchase agreements.
45-Day MSME Payment Guarantee
Larger member corporates could commit to a voluntary 45-day MSME payment guarantee, backed by aggressive use of the TReDS platform and supply-chain finance, to ease working capital pressure on small enterprises during this volatile period.
Supply-Chain Ringfencing and Deeper Import Substitution
Indian supply chains will be ringfenced through diversified sourcing, strategic inventory buffers and tie-ups with alternative geographies, alongside deeper domestic value addition in components, specialty chemicals and capital goods.
Front-Loaded Private Capex, Voluntary Price Restraint and Internship Push
Industry may front-load FY27 investments in manufacturing, energy transition and digital infrastructure, exercise voluntary price restraint on essential inputs, and scale up internship intake over the next twelve months under the PMIS.
While India remains better insulated from external shocks than ever before, spillover effects from the West Asia crisis continue to pose near-term downside risks.
CII believes that the industry-Government compact is the surest path to protecting the exchequer, the consumer and India’s growth trajectory simultaneously, and to accelerating the journey towards Viksit Bharat by 2047.
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