India is set to introduce sovereign credit guarantees on loans amounting to $26.7 billion to assist businesses, especially small firms, adversely affected by the ongoing crisis in West Asia, linked to the US-Israeli conflict with Iran. The initiative aims to provide a 90% guarantee on loans up to ₹100 crore ($10.75 million) to banks, ensuring that lenders are protected in case of borrower defaults. This move comes as India faces the dual challenge of rising inflation and slower economic growth, exacerbated by supply chain disruptions in sectors such as textiles and glass manufacturing. The estimated cost of this program to the government is between ₹17,000 to ₹18,000 crore ($1.83 billion to $1.94 billion). Similar guarantees were previously implemented during the Covid-19 pandemic to support struggling sectors, including travel and tourism, helping businesses resume operations and manage debts.