Key Takeaways
- RBI extends maximum export credit period from 1 year to 450 days.
- Debt repayments for term loans and working capital interest deferred from Sep-Dec 2025.
- Export proceeds repatriation timeline increased from 9 to 15 months.
- Goods shipment period extended from 1 to 3 years for advance payments.
The Reserve Bank of India has introduced significant relief measures for exporters facing global trade disruptions, easing debt repayment rules and extending credit periods to support liquidity.
Effective immediately, the new guidelines increase the maximum pre-shipment and post-shipment export credit period from one year to 450 days for credit disbursed until March 31, 2026.
Enhanced Credit Flexibility
Lenders can now liquidate packing credit facilities availed by exporters on or before August 31, 2025, where goods dispatch couldn’t occur. This can be done through legitimate alternate sources including domestic sale proceeds or substitution with another export contract.
A packing credit facility is a loan extended to exporters by banks to finance pre-shipment activities required to fulfill export orders.
Debt Repayment Relief
To ease financial pressure, the RBI has allowed deferment of all term loan payments and recovery of working capital interest falling due between September 1, 2025, and December 31, 2025.
Banks can recalculate ‘drawing power’ in working capital facilities by either reducing margins or through reassessment during this period.
FEMA Regulation Relaxations
The central bank has relaxed FEMA regulations on realization and repatriation of export proceeds and advance payments against exports.
The time period for such realization and repatriation has been extended from nine months to fifteen months from the date of export from India.
Additionally, the shipment period for goods has been increased from one year to three years from the date of receipt of advance payment or as per agreement, whichever is later.
This move follows the government’s recent announcement of a Rs 45,000-crore package for boosting exports.
“The proposed regulatory measures coupled with the credit guarantee scheme for exporters announced by Government of India 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,” says Anil Gupta, senior vice president & co group head, Financial Sector Ratings, ICRA Ltd.
