The Reserve Bank of India (RBI) has eased several repayment and compliance requirements for exporters, granting them more time to realise overseas proceeds and allowing lenders to offer temporary relief on trade-related loans. The measures follow the Union government’s recently announced ‘export promotion mission’ and efforts to improve credit flow to exporting firms.
The changes, issued through a Gazette notification amending the Foreign Exchange Management Act (Fema) rules and a circular to lenders, extend the deadline for realisation of export payments to 15 months, up from nine, and relax a series of loan conditions aimed at helping companies affected by global trade disruptions. The move comes amid mounting pressure on exporters to the United States after Washington imposed tariffs and additional sanction-linked duties on imports associated with Russian oil.
The RBI said the relaxed timelines and revised credit conditions were intended to cushion exporters experiencing delayed payments, tighter margins and increased compliance checks in key markets. Under the amended Fema framework, exporters now have 15 months to bring in export earnings. The deadline for settling or adjusting advance payments received from overseas buyers has been extended from one year to three.
In a separate circular to banks, co-operatives and non-banking financial companies, the RBI outlined how lenders should support affected exporters. Firms in specified sectors holding standard export credit as of 31st August may be offered a four-month moratorium on loan instalments and interest from 1st September to 31st December. Interest will continue to accrue, but only on a simple-interest basis. Lenders may convert the accumulated dues into a separate loan repayable between April and September 2026.
Banks have also been permitted to relax working-capital norms by reducing margins and recalculating drawing power. Exporters may be given up to 450 days to repay pre-shipment and post-shipment credit. Those that have completed production but are unable to ship goods may repay packing credit using domestic sales or proceeds from other export consignments.
The RBI stated that these relaxations would not be considered loan restructuring, and lenders must ensure borrowers’ credit histories remain unaffected. However, banks will be required to create a 5% general provision against such accounts as a prudential safeguard.
The central bank said the measures were designed to prevent short-term trade disruptions from escalating into loan defaults, give exporters greater flexibility to manage cash flows and enable lenders to support viable firms without compromising credit discipline.
Southern India Mills’ Association (SIMA) Chairman Durai Palanisamy has welcomed the Reserve Bank of India’s latest relief measures, saying they will ease cash-flow pressures and reduce financial stress for businesses without imposing heavy interest costs. He noted that exporters, in particular, would benefit from the additional time granted to manage working capital and realise export proceeds.
Palanisamy also urged the government to extend similar support to the capital-intensive spinning, weaving and processing sectors—covering HS Codes 52, 54, 55 and 60—which he warned are facing acute financial distress and risk slipping into non-performing asset (NPA) status. These segments supply essential yarn and fabric to readymade garment and made-up manufacturers, many of whom abruptly halted procurement following disruptions in export demand.
