IESA Applauds ECLGS 5.0: Strengthening the Backbone of India’s Electronics Economy
CHENNAI, May 7, 2026: The India Electronics and Semiconductor Association (IESA), the apex industry body representing the ESDM sector, has welcomed the Union Cabinet’s approval of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
According to IESA, the scheme’s 100% credit guarantee support for MSMEs, along with zero guarantee fee and additional access to working capital, will provide critical liquidity support to businesses facing global supply chain and geopolitical challenges.
MSMEs are considered the backbone of India’s electronics manufacturing ecosystem, contributing significantly to component manufacturing, EMS, repair and refurbishment services, semiconductor supply chains, tooling, materials, and design-led innovation.
IESA President Ashok Chandak stated that nearly 75% of applications under the recently introduced Electronics Component Manufacturing Scheme (ECMS) came from the MSME sector.
He further noted that MSMEs contribute nearly 30% to India’s GDP, around 35% of manufacturing output, over 45% of exports, and provide employment to more than 32 crore people nationwide.
“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 industry, where supply chain continuity, inventory cycles, and working capital are critical, ECLGS 5.0 is expected to act as a major confidence booster. Industry experts believe the scheme will especially benefit Tier-2 and Tier-3 suppliers by helping them integrate faster into global value chains and strengthen localisation efforts.
IESA also noted that the scheme complements key government initiatives such as the India Semiconductor Mission, PLI schemes, ECMS, and the broader Make in India programme by improving access to credit for smaller enterprises.
The association added that the one-year moratorium and extended loan tenure under ECLGS 5.0 would support MSMEs in scaling operations, improving competitiveness, and increasing domestic value addition.
