RBI Extends Trade Relief to Exporters Facing Tariff Headwinds

• Exporters from India are facing global trade disruptions, particularly due to a steep 50% tariff imposed by the U.S. on Indian shipments, effective 27 August 2025.
• The tariff has impacted cash flow and timely repatriation of export proceeds.

Key Measures Announced:

1. Regulatory Amendment:
   • The change is made through the Foreign Exchange Management (Export of Goods & Services) (Second Amendment) Regulations, 2025.
   • Notification issued on 13 November 2025 by RBI Regional Director Rohit P. Das.
2. Extended Export Realisation Timelines:
   • Exporters now have 15 months (up from 9 months) to repatriate export proceeds.
   • Advance payments from overseas buyers can now be settled within 3 years instead of 1 year.
3. Loan Moratoriums and Credit Support:
   • Exporters holding standard export credit as of Aug 31 can avail a 4-month moratorium (Sept–Dec 2025) on loan installments and interest.
   • Interest accrues as simple interest, with the option to convert into a separate loan repayable between April–Sept 2026.
4. Working Capital Flexibility:
   • Banks may reduce margins and recalculate drawing power, allowing exporters up to 450 days for pre- and post-shipment credit repayment.
   • Exporters unable to ship goods may repay packing credit via domestic sales or proceeds from other export orders.
5. Prudential Safeguards:
   • These relaxations won’t be treated as restructuring, protecting exporters’ credit histories.
   • Banks are required to maintain a 5% general provision on such accounts.

Significance:

• Provides liquidity relief to exporters struggling due to external trade shocks.
• Helps mitigate financial stress arising from delayed payments and steep foreign tariffs.
• Supports India’s export competitiveness amid global trade tensions.