India’s exporters have been facing rising pressure after the United States imposed a steep 50% tariff in August on Indian goods. To help exporters deal with delayed orders, tighter cash flow, and loan repayment issues, the Reserve Bank of India (RBI) has announced a wide set of relief measures. These steps are expected to reduce the immediate financial burden on exporters and give them more breathing space until trade conditions improve.
The measures include a four-month moratorium on loan repayments, relaxed credit rules, a longer time for repaying export loans, and relief under asset classification norms. The announcement comes soon after the Union government approved a major six-year Export Promotion Mission worth ₹25,060 crore. Together, these efforts are aimed at helping Indian exporters manage short-term disruptions caused by the sudden rise in tariffs.
Four-month moratorium to ease debt pressure
One of the biggest parts of the RBI’s package is a moratorium from 1st September to 31st December, 2025. During this period, exporters do not have to repay their term loans or pay interest on working capital loans. This applies to all banks, NBFCs, and financial institutions regulated by the RBI.
Exporters will still have to pay interest for these four months, but it will be charged as simple interest and not compound interest. The interest amount collected during the moratorium will be turned into a separate loan, which exporters can repay between 31st March and 30th September, 2026.
This move is expected to reduce immediate pressure on exporters who are struggling with delayed payments from abroad and rising operational costs. By postponing repayments, exporters will have more liquidity to manage day-to-day expenses.
For exporters who have taken working capital loans, banks will be allowed to reduce the margin requirement while calculating “drawing power” during the moratorium period. This simply means exporters can borrow slightly more against the same collateral, improving their cash flow during a difficult period.
Export credit tenure extended to 450 days
The RBI has also relaxed rules for export credit. Banks that provide pre-shipment and post-shipment export credit can now extend the repayment period to 450 days, compared to the earlier limit of 270 days. This extension applies to export credit disbursed up to 31st March, 2026.
This change is extremely important because exporters are facing unexpected delays in shipment schedules and payment cycles due to the trade conflict with the US. The extra time will make it easier for them to repay these loans without defaulting.
For exporters who already took packing credit before 31st August, 2025, but could not dispatch goods on time, lenders can now allow them to clear these loans through alternate sources. This could include domestic sales of the same goods or replacing the original export order with a new one. Packing credit is a crucial pre-shipment loan used to purchase, process, and pack goods before they are shipped out of India.
Relaxed asset classification norms to prevent defaults
The RBI has also ensured that exporters’ credit scores or loan classification will not be affected because of the moratorium. Usually, if a borrower delays payments, the number of “days past due” increases, and their loan can be downgraded to a non-performing asset. But for exporters availing this relief package, the moratorium period will not be counted while calculating these overdue days.
This means that the moratorium will not be treated as loan restructuring, nor will exporters face any negative impact on their credit history. The RBI has instructed Credit Information Companies to ensure that the relief measures do not harm borrowers’ credit scores in any way.
Banks will, however, need to create a general provision of 5% for accounts that were overdue but still classified as “standard” on 31st August, 2025, and where relief has been given. While this will increase provisioning for banks, industry analysts say it will not significantly affect their overall profitability.
Major amendments to FEMA rules
To further support exporters, the RBI has made key changes to the Foreign Exchange Management Act (FEMA) regulations. Exporters will now have more time to bring back export proceeds to India. The deadline for realisation and repatriation of export earnings has been extended from nine months to 15 months.
Additionally, exporters who receive advance payments from foreign buyers will now have three years, instead of one year, to ship out the goods. This is a big relief for exporters dealing with longer production cycles or delayed logistics.
Why these measures were necessary
The RBI’s intervention comes at a time when Indian exporters are struggling due to the US’s sudden decision to impose a 50% tariff on Indian goods from 27th August. This is now the highest tariff imposed on any country by the US. The US reportedly increased tariffs because of a penalty duty related to India’s purchase of Russian oil.
As a result of these higher duties, India’s exports to the US fell by 12% in September. Many exporters are seeing delayed payments, rising costs, and a shortage of working capital. Some export-dependent businesses are already finding it difficult to repay loans, raising concerns over potential loan defaults.
The RBI’s package aims to prevent these temporary difficulties from turning into long-term financial stress.
Expected benefits for exporters
The relief package is expected to give exporters immediate breathing space. With repayments postponed, extended credit timelines, and relaxed norms, exporters will be better equipped to handle payment delays and order cancellations.
According to Anil Gupta, Senior Vice President and Co-Group Head at ICRA Ltd, these measures, along with the government’s credit guarantee scheme for exporters, will help stabilise cash flows in the short term. He added that the regulatory steps will help viable export businesses continue their operations without facing undue financial stress.
These measures also come at a crucial time when India and the US are trying to negotiate a bilateral trade agreement. Recently, US President Donald Trump said that the US is close to finalising a “fair trade deal” with India and is considering reducing tariffs in the future.
Which export sectors will benefit
Several sectors are eligible for the RBI’s relief package. These include organic chemicals, plastics, rubber, leather, carpets, apparel, footwear, metal products, electrical machinery, nuclear reactors, boilers, aluminium goods, furniture, mattresses, and cushions.
These industries are among the worst affected by the new US tariffs, and the relief package is expected to help them stay afloat while negotiations continue.
While banks will have to make a 5% general provision for certain accounts, analysts say this is manageable and will not harm profitability in the near term. However, the real concern is how many exporters will opt for the moratorium. If a very large number take the relief, banks may face uncertainty regarding their future asset quality.
For now, the relief measures have already come into effect, and exporters can start using them immediately. With global trade tensions still evolving, the RBI’s package is expected to provide crucial support until conditions stabilise.