RBI Announces Relief Measures to Support Exporters Hit by US Tariffs

Mumbai: The Reserve Bank of India (RBI) on Friday announced a slew of trade relief measures to support exporters reeling under the steep hike in US tariffs including a moratorium on all term loans and recovery of interest on working capital loans that are due between September 1 and December 31, 2025. The central bank has also permitted the country's exporters to repatriate earnings from their shipments in 15 months instead of the existing timeline of 9 months and eased limits for shipment of goods to three years from the current time frame of one year. The central bank has also relaxed the norms for repayment of export credit. The maximum credit period for export loans disbursed until March 31, 2026 has been enhanced to 450 days from 270 days.

Lenders have also been permitted to liquidate packing credit facilities availed by exporters on or before August 31, 2025, where dispatch of goods could not take place, from any legitimate alternate sources, including domestic sale proceeds of such goods or substitution of contract with proceeds of another export order.

Lenders have been permitted to recalculate the ‘drawing power’ in working capital facilities either by reducing the margins or basis reassessment, during the above period.

The central bank said that the guidelines will come into force with immediate effect.

Anil Gupta, Senior Vice President & Co Group Head - Financial Sector Ratings, ICRA Ltd said that the proposed regulatory measures coupled with the credit guarantee scheme for exporters announced by Government of India could provide liquidity relief to exporters and help them ride out the near-term pressure on cash flows because of deferment of orders or payments. “However, we will have to monitor the extent of moratorium or deferment availed by the exporters. A large quantum of borrowers availing either of relief measures could potentially increase the uncertainty on asset quality for the lenders. A five percent provisioning on such loans, where lenders have given a relief to exporters, could also result in increase in provisions, but unlikely to have a material impact on near-term profitability," he added.

India's cabinet on November 12 approved spending Rs 45060 crore($5.1 billion) on support for exporters, including Rs 20000 crore in credit guarantees on bank loans. The plan includes the allocation of Rs 25060 crore over six years for affordable trade finance for small exporters, logistics and market support under an export promotion package to help offset the impact of recent U.S. tariff hikes.

Exporters have been lobbying for relief after US President Donald Trump imposed a 50 per cent tariff on Indian goods, citing India’s continued purchase of Russian crude oil. The punitive tariffs have impacted textiles, jewellery, seafood, leather goods and chemicals sectors. Official data show India’s exports to the US dropped nearly 12 per cent in September compared to the previous year.