NEW DELHI, November 17, 2025 — The Reserve Bank of India (RBI) has introduced an extraordinary set of Trade Relief Measures to stabilize India’s export sector, which is grappling with global trade disruptions and tariffs (particularly the steep US tariffs imposed in August). The package, effective immediately, grants a temporary moratorium on loan repayments, extends credit tenors, and provides crucial breathing room on foreign exchange compliance.
This comprehensive guide breaks down the core components of the relief package and answers the key questions on every reader’s mind.
1. The Core Relief: Loan Moratorium & Interest Rules
This section addresses the most pressing question: Will I have to pay my loan installments?
| Component | Detail | Reader Explanation |
| Moratorium Period | September 1, 2025, to December 31, 2025 (Four Months). | Eligible exporters can pause the payment of term loan installments (principal) and interest on working capital loans due during this four-month window. |
| Interest Accrual | Simple Interest basis (no compounding/interest on interest). | Interest will still accrue (be charged) during the pause, but it will be calculated simply, providing a minor saving compared to compound interest. |
| Repayment of Accrued Interest | Converted into a Funded Interest Term Loan (FITL). Repayable between March 31, 2026, and September 30, 2026. | The interest accumulated during the moratorium won’t be due immediately. It’s converted into a separate, short-term loan that must be paid back within six months next year. |
| Asset Classification | Crucially, the loan status remains ‘Standard’. The moratorium period is excluded from Days Past Due (DPD) calculation. | Your credit history will NOT be affected. Availing this relief does not classify your account as a Non-Performing Asset (NPA) or a restructured loan, preserving your credit score. |
2. Eligibility & Application (Who Benefits?)
Who exactly is eligible for this package, and how do I apply for the moratorium?
Q: Which Exporters are Eligible for the Moratorium?
- Export Credit Holder: The borrower must have had an outstanding export credit facility from an RBI-regulated entity (like a bank or NBFC) as of August 31, 2025.
- Asset Status: The loan account must have been classified as a ‘Standard’ asset (i.e., not a default/NPA) as of August 31, 2025.
- Sectors: While the relief is broadly aimed at all exporters, sectors that are particularly stressed and eligible include Textiles, Apparel, Leather, Gems & Jewellery, Chemicals, and Engineering Goods.
Q: How Do I Avail the Relief?
- The relief is not automatic. Banks and other Regulated Entities (REs) must develop a formal policy and communicate the eligibility criteria.
- Action Required: Exporters should immediately contact their lending bank or NBFC to formally apply for the moratorium and the other benefits under the Trade Relief Measures Directions, 2025.
3. Financial and Operational Flexibility
How does this help my working capital and my long-term credit cycles?
Q: How does the RBI extend my trade cycle time?
The RBI relaxed rules governing export credit and FEMA (Foreign Exchange Management Act) compliance:
| Regulation Relaxed | Old Limit | New Limit | Why it Matters |
| Export Credit Repayment (Pre- & Post-Shipment) | 270 days | Up to 450 days (for credit disbursed till March 31, 2026) | Gives exporters 180 extra days to repay the short-term working capital loans, accommodating delayed payments from international buyers. |
| Realisation of Export Proceeds (FEMA Rule) | 9 months | 15 months (from date of export) | Exporters have an additional six months to receive payment from foreign clients and repatriate the funds to India, easing cash flow pressure. |
| Shipment against Advance Payment (FEMA Rule) | 1 year | 3 years | Gives significant flexibility for long-term projects or complex shipments delayed by supply-chain issues or tariffs. |
Q: What if I produced goods but couldn’t ship them?
The RBI allows lenders to permit the liquidation of packing credit facilities (taken before August 31, 2025) through alternate legitimate sources. This means you can repay the pre-shipment loan using:
- Domestic Sale Proceeds of the goods (if allowed).
- Proceeds from a Substitute Export Order.
- Any other legitimate alternate source.
Q: What about my working capital limits?
Banks and NBFCs are permitted to recalculate the ‘Drawing Power’ of your working capital facilities by either reducing the margin requirements or re-assessing your limits. This is intended to free up some immediate cash flow for day-to-day operations.
4. Impact and Conclusion
What is the overall significance of this move?
The RBI’s relief package is a pro-active, confidence-building measure that gives exporters immediate financial stability. It recognizes that the current distress is due to external, global headwinds (like tariffs and supply chain issues), not underlying business viability.
While the measures provide short-term relief, analysts suggest that the extended repatriation window (9 to 15 months) may temporarily reduce the immediate inflow of US Dollars into the Indian market, potentially placing near-term pressure on the Indian Rupee before the situation stabilizes. Overall, the package is a vital cushion to help the sector adjust to the challenging new trade realities.