RBI announces relief measures for tariff-hit export sectors; eases credit access, repayment

In a relief to tariff-hit export-oriented sectors and their lenders, the Reserve Bank of India (RBI) on Friday announced several measures to ease their access to working capital, enable higher borrowing limits, and defer loan repayments until the end of the calendar year.

“Reserve Bank has taken the following measures with a view to mitigating the impact of trade disruptions on exports arising on account of global headwinds,” it said in a release, adding that the objective is also to lessen the burden of debt servicing and to ensure the continuity of businesses.

The measures titled Reserve Bank of India (Trade Relief Measures) Directions, 2025, will be effective immediately.

The RBI has notified a list of 20 eligible sectors across fisheries, chemicals, plastics and rubber, leather and textiles, footwear, precious metals and semi-precious stones, iron and steel, aluminium, electrical and surgical machinery and equipment, vehicles, furniture, and nuclear reactors.

Lenders are pleased that RBI has allowed some leeway when it comes to export loans.

“This is a great step by the Reserve Bank of India and would help us in supporting exporters, especially those hit by tariffs. Bankers were hopeful of certain measures in the face of tariffs, and these are certainly welcome,” Ashok Chandra, chief executive officer (CEO), Punjab National Bank, told Mint.

Easing debt burden

The central bank has allowed a deferment of payment on all term loans and the recovery of interest on working capital loans due between 1 September 2025, and 31 December.

For working capital in the form of cash credit or overdraft, although interest will accrue between October and December, it will be calculated on a simple interest basis without any compounding effect, RBI said, adding that the recovery of this interest may be deferred.

“The accumulated accrued interest during moratorium/deferment period may be converted into a funded interest term loan which shall be repayable in one or more installments after 31 March 2026, but not later than 30 September 2026,” it said.

“The proposed regulatory measures coupled with the credit guarantee scheme for exporters announced by thegovernment 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,” Anil Gupta, senior vice president and co-group head of financial sector ratings at Icra, said.

Easier access to funds

RBI has also allowed lenders to recalculate ‘drawing power’ in working capital, either by reducing margins or based on the reassessment, during the above period. ‘Drawing power’ is the maximum amount a borrower can withdraw from their working capital loan, and is usually calculated monthly, on the basis of a business’s current assets, like inventory and receivables, adjusted against a bank-mandated margin.

Additionally, the regulator extended the maximum credit period for pre-shipment and post-shipment export credit from 270 days to 450 days. The relief will be applicable on export credit disbursed till 31 March 2026.

Furthermore, lenders have been permitted to liquidate packing credit facilities availed of by exporters on or before 31 August 2025, where the dispatch of goods was not possible. This liquidation may be based on any legitimate alternate sources, including domestic sale proceeds of such goods or substitution of contract with proceeds of another export order, RBI said.

Asset quality impact

Only borrowers who are engaged in exports relating to any of the specified sectors, have an outstanding export credit facility and are classified as ‘standard assets’ by lenders as of 31 August 2025, will be eligible for these measures.

“REs (regulated entities) other than those which have sanctioned the export credit facility to the borrower may satisfy themselves that the borrower qualifies under the criteria, basis a certification to be obtained from the RE(s) which has/have extended export credit to the borrower,” the notification said.

“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,” Icra’s Gupta said, adding that a 5% provisioning on such loans, where lenders have given a relief to exporters, could also result in an increase in provisions, but is unlikely to have a major impact on near-term profitability.

Lenders will also be required to frame a policy for providing the relief measures, including specifying the objective criteria for considering the relief, all of which will need to be disclosed in the public domain, RBI said.

Government measures

RBI also notified two measures announced by the government on 13 November, for the realization and calculation of exports by businesses.

The government extended the time for realisation and repatriation of the full export value of goods, software or services exported from India from nine months to 15 months from the date of export. It also increased the time period for shipment of goods from one year to three years from the date of receipt of advance payment or as per the agreement, whichever is later.

On Wednesday, the Union cabinet approved two major initiatives worth a cumulative ₹45,060 crore to strengthen India’s export ecosystem and ease liquidity pressures for exporters. This included the launch of the Credit Guarantee Scheme for Exporters (CGSE), which enables credit guarantee for collateral-free loans of up to ₹20,0000 crore for eligible borrowers, and the Export Promotion Mission (EPM).

“The Cabinet’s approval of the ₹25,060 crore Export Promotion Mission comes at a pivotal time for Indian exporters, especially MSMEs, who are navigating global headwinds such as the recent escalation in U.S. tariffs,” said Munindra Verma, chief executive officer of trade receivables exchange M1 NXT.

“For MSMEs, the initiative could unlock significant opportunities by expanding market access and improving ease of doing business,” he said, adding that it will strengthen India’s trade competitiveness by addressing key challenges in logistics, credit access, and export infrastructure.