Trade Relief Measures Announced by the Reserve Bank of India (RBI)

The Reserve Bank of India (RBI) has introduced a series of trade relief measures to address the challenges faced by exporters due to global economic disruptions. These measures aim to provide flexibility and support to exporters, ensuring smoother operations and mitigating the adverse effects of trade disruptions. Below is a detailed overview of the initiatives announced by the RBI:

A. FEMA Regulation Updates 

The RBI has revised the Foreign Exchange Management Act (FEMA) regulations to provide exporters with extended timelines for realization and repatriation of export proceeds. The key changes include:

Extension of Realization Period:
- The time period for realizing and repatriating the full export value of goods, software, and services exported from India has been extended from 9 months to 15 months from the date of export.
- This extension provides exporters with additional time to manage their transactions amidst global uncertainties.
Increase in Shipment Period:
- The time period for the shipment of goods has been increased from 1 year to 3 years from the date of receipt of advance payment or as per the agreement, whichever is later.
- This change allows exporters to better align their shipment schedules with market conditions and buyer requirements.

B. Trade Relief Measures Directions, 2025 

The RBI has issued specific directions to ease the financial burden on exporters and impacted sectors. These measures include:

1. Debt Repayment Relief 

To support sectors affected by global headwinds, the RBI has introduced the following:

Moratorium/Deferment:
- A moratorium on or deferment of payment for all term loans and recovery of interest on working capital loans falling due between September 1, 2025, and December 31, 2025.
- This will provide temporary relief to businesses struggling with cash flow issues.
Recalculation of Drawing Power:
- Lenders are permitted to recalculate the ‘drawing power’ in working capital facilities by reducing margins or reassessing the credit requirements during the specified period.
- This measure ensures that businesses have access to adequate working capital to sustain operations.

2. Export Credit Relaxation 

To support exporters in managing their credit obligations, the following relaxations have been introduced:

Extension of Credit Period:
- The maximum credit period for pre-shipment and post-shipment export credit disbursed until March 31, 2026, has been extended from 1 year to 450 days.
- This provides exporters with additional time to repay their credit facilities.
Liquidation of Packing Credit Facilities:
- Exporters who availed packing credit facilities on or before August 31, 2025, but were unable to dispatch goods due to disruptions, are now allowed to liquidate these facilities using legitimate alternate sources.
- These sources include domestic sale proceeds of the goods or substitution of contracts with proceeds from another export order.

Implementation Timeline

The RBI has announced that these guidelines will come into effect immediately, ensuring prompt relief for exporters and impacted sectors.

Conclusion

The trade relief measures introduced by the Reserve Bank of India reflect its commitment to supporting exporters and businesses during challenging times. By extending timelines, providing moratoriums, and easing credit repayment terms, the RBI aims to mitigate the impact of global economic headwinds and ensure the stability of India’s export sector.

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Source: RBI

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