The Reserve Bank of India (RBI) has unveiled a sweeping relief package to cushion exporters against disruptions caused by US tariffs. Measures include extended timelines for export proceeds, moratoriums on debt repayments, and relaxed FEMA norms. The package aims to ease liquidity stress, protect jobs, and stabilise India’s trade sector.
In a decisive move to shield India’s export sector from the fallout of rising US tariffs, the Reserve Bank of India (RBI) on November 14 announced a comprehensive set of trade-relief measures. The package, detailed under the RBI (Trade Relief Measures) Directions, 2025, is designed to ease financial strain, simplify foreign exchange processes, and provide breathing space for exporters grappling with delayed shipments and tightening working capital cycles.
The announcement comes at a critical juncture, as exporters across sectors such as textiles, chemicals, footwear, and software face mounting challenges in realising payments and meeting debt obligations. By extending timelines and offering moratoriums, the RBI aims to stabilise cross-border commerce and safeguard India’s export competitiveness.
Notable Updates
• Extended Realisation Window: Exporters now have 9–15 months (up from 9 months earlier) to realise and repatriate proceeds from goods, software, and services exports
• Shipment Flexibility: The permitted time for shipment of goods against advance payments has been increased from 1 year to 3 years, easing operational bottlenecks
• Debt Moratorium: Exporters in 20 identified sectors will benefit from a moratorium on term loan repayments due between September 1 and December 31, 2025, with interest charged on a simple basis
• FEMA Relaxations: Norms under the Foreign Exchange Management Act (FEMA) have been eased to simplify compliance and reduce procedural hurdles
• Sectoral Coverage: Relief measures specifically target industries most affected by tariffs, including organic chemicals, plastics, apparels, and footwear
• Banking Clarity: Authorized Dealer banks have been given operational flexibility to streamline processes for exporters and importers
Major Takeaways
• Liquidity Support: Extended timelines and moratoriums will ease cash flow pressures for exporters.
• Operational Relief: Shipment flexibility reduces risks of contract breaches and penalties.
• Sector-Specific Aid: Targeted relief ensures maximum impact for industries hit hardest by tariffs.
• Policy Alignment: The measures align India’s trade framework more closely with global best practices, enhancing resilience.
Why It Matters
The RBI’s intervention underscores the strategic importance of India’s export sector, which contributes significantly to GDP and employment. By cushioning exporters against tariff shocks, the central bank is not only protecting businesses but also reinforcing India’s credibility as a reliable trading partner. These measures are expected to stabilise trade flows, preserve jobs, and sustain growth momentum amid global headwinds.
Sources:
The Hindu, Banking School
